Trading at bargain PE of less than 7, with yields averaging over 5%, Poland’s stock market has caught the eye of value investors. Jack Hough at SmartMoney says Poland’s discount to other European equities is partly attributable to weakness in the Polish free-floating Zloty currency.
Hough says Poland’s economy is expected to grow at a rate 2.5% this year, faster than any country in the 27-member European Union.
Poland’s fiscal situation is also much stronger than that of the U. S., with a budget deficit of 5.1% to GDP; significantly lower than the comparable U. S. ratio of 9% to GDP.
Hough suggests venturous investors may want to initiate a small stake in one of two ETFs tracking the Polish market. The iShares MSCI Poland Investable Market Index Fund (EPOL) has a reasonable 0.59% expense ratio and yields 5.4%, while the Market Vectors Poland ETF (PLND) yields 5.44% with an expense ratio of 0.60%.