TUR: Not Easy To Take A Definitive Stance

2025-01-09 15:02:16 ET

Summary

• Since December 2023, the iShares MSCI Turkey ETF has experienced a volatile journey while eventually underperforming global markets.
• Looking ahead, we feel quite ambiguous about TUR's prospects as the macroeconomic backdrop, the valuation picture, and the technicals all provide a conflicting image.
• Turkey's GDP prospects look underwhelming, but inflation appears to be trending lower, and the central bank has just kickstarted a movement of interest rate cuts that could persist through this year.
• TUR's valuations look very cheap, more so in light of the earnings that its holdings offer.
• TUR, which does not look like the most attractive counter in the emerging market space, is currently trading below its 200DMA, and has broken a trendline on the monthly chart.

Introduction

Back in December 2023, we had explored the possibility of pursuing the iShares MSCI Turkey ETF ( TUR ), a $182m sized product that focused on a pool of Turkish stocks. While we appreciated the valuation backdrop, and the potential for Turkish stocks to potentially mean-revert, we questioned if conditions in Turkey and the weakness of the Turkish lira, were going to be conducive to facilitate meaningful alpha....

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