Looking for some relative strength in ETF land? I bet you Turkey did not jump to the top of your mind. But the iShares MSCI Turkey ETF (NASDAQ:TUR) has been on a tear in the last year. Remarkably, the fund is higher by more than 100%, obviously outpacing the S&P 500 ETF (SPY).
I see more upside ahead, and I outline prices on the chart to monitor in this Industrials sector-heavy ETF.
Turkey ETF With Massive Alpha vs SPY YoY
According to the issuer, TUR offers investors a broad range of companies in Turkey, employing a single-country view. With an annual expense ratio of 0.58%, it is not the cheapest ETF around, so I would rather use the fund to express a near to intermediate-term outlook rather than owning it for the long haul.
With more than $300 million in assets, it’s sizable though the 30-day median bid/ask spread is not insignificant at 14 basis points. Daily volume over the past 30 sessions has averaged around 450,000 shares, though, so that aspect of tradeability is not bad. TUR features a 2.15% trailing 12-month yield with semiannual dividends, per iShares. It is also a volatile ETF with a 3-year average standard deviation of almost 40%.
Digging into the portfolio, I like how low the price-to-earnings ratio is at just 5.0, according to Morningstar. Plotting as a high-growth, low-yield fund, I consider it more of a value bent, actually, given its high exposure to Industrials. What’s more, a 0.42 price-to-sales ratio is not indicative of a super-growthy equity basket.
Holding just 62 stocks, the top 10 positions account for 49% of total assets, which is concentrated, but the biggest stock is just 6.8%. Total turnover is not high at 18%.
TUR: Portfolio & Factor Profiles
The sector view is always critical to analyze whenever you are looking at country ETFs. Here, TUR has a large overweight to the cyclical Industrials area along with a much greater weight in Materials compared to the S&P 500. Tech is hardly seen in the fund and other typical growth sectors such as Consumer Discretionary and Communication Services are small pieces of the Turkey pie.
TUR: Industrials & Materials Heavy, Light on Tech
March has historically been the best month to scoop up shares of TUR, according to seasonality data from Equity Clock. This is another arrow in the bulls’ quiver.
Bullish TUR Seasonal Trends in March
The Technical Take
With a low valuation and cyclical bent, I see bullish trends on the long-term chart. Notice in the graph below that TUR broke out above the key $30 area late last year and then held that point on a retest earlier in 2023, though it briefly undercut the early 2021 peak – that is why putting some cushion to your stop is prudent to avoid whipsaws.
I see resistance at the 2016 through 2018 range highs in the $46 to $48 zone. Long here with a target of $46 appears to be a good play. We could see some back and fill off the near-term $37 level – buying on a dip to a gap-fill near $32 sets up a stronger risk/reward idea.
TUR: Bullish Breakout, Eyes $46
The Bottom Line
Even after a doubling over the last year-plus, I see value in TUR and the technical setup appears bullish. With strong seasonal trends, too, the stars may still be aligned for this high-momentum fund.
Leave a Reply