Trackinsight: Czech stocks rise to a 13-year high

Czech stocks rose to a 13-year high. Investors in Europe and America can gain exposure to Czech markets through Exchange-Traded-Funds (ETFs).

Czech stocks rise to decade-high levels

Czech Republic's benchmark index, the "PX", rose to 1,474 points on Wednesday to reach its highest level since July 2008. The PX (until March 2006 the PX 50) is a major stock market index which tracks the performance of large companies listed in the Prague Stock Exchange. Ten of the eleven companies in the index have generated positive returns over the past year, led by CEZ AS (Energy, +57.3%), Erste Group Bank AG (Financials, +49.21%), Ceska Zbrojovka Partner (Firearms, +49.14%), Komercni Banka (Financials, +42.21%), and Moneta Money Bank (Financials, +23.52%). Photon, a Dutch solar energy and water treatment solutions company is only slumping company in the index, falling by -58.41% over the same period.

Gaining access to Czech stocks through ETFs in Europe

Investors can gain access to the Czech market through Exchange-traded-funds (ETFs). In Europe, the Expat Czech PX UCITS ETF (CZX) tracks the performance of the PX Index and provides a liquid and diversified exposure to the Czech stocks. CZX has a total expense ratio of 1.38% and is available for Bulgarian and Foreign investors on the Bulgarian Stock Exchange and on the Frankfurt Stock Exchange (XETRA) respectively. Over the past year, the fund has generated a positive return of +40% in EUR terms. 

Other European funds with large exposure to Czech stocks include the Lyxor MSCI Eastern Europe Ex Russia UCITS ETF (13% exposure), Amundi MSCI Eastern Europe Ex Russia UCITS ETF (13% exposure), and iShares MSCI Eastern Europe Capped UCITS ETF (4.09% exposure).

Gaining access to Czech stocks through ETFs in America

In America, the actively managed Cambria Global Value ETF (GVAL) has a over 10% exposure to Czech Republic by holding CEZ AS (4.04%), Moneta Money Bank (2.73%), Komercni Banka (2.33%) and Philip Morris CR AS (1.52%). The fund managers select 25% of countries from a list of 45 developed and emerging economies, then target the 10 most undervalued stocks out of the top 30 largest stocks by market capitalization within each country. GVAL has a total expense ratio of 0.71% and trades primarily on the CBOE BZX exchange.

With a play on Nuclear and Uranium, VanEck Uranium+Nuclear Energy ETF (NLR) provides around a 5% exposure to Czech Republic through its investment in CEZ AS. The fund tracks the MVIS Global Uranium & Nuclear Energy Index (MVNLRTR) and invests in a small portfolio of companies involved in the nuclear energy industry, ranging from industrial conglomerates to uranium miners. Eligible firms must derive at least 50% of their revenue from this segment. NLR has a net expense ratio of 0.6% and trades primarily on the NYSE Arca.

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