Finans Portfoy has introduced style-based exchange-traded fund (ETF) investing to the Turkish market, with the launch of the first small-cap ETF in Turkey. As the name suggests, the Turkish Smaller Companies Istanbul 25 ETF tracks the performance of 25 small-cap companies on the Turkish market. The fund is known by its Turkish acronym, SMIST.
Finans Portfoy entered the ETF market in Turkey in 2003 with the launch of the Dow Jones Istanbul 20 ETF, tracking the 20 largest and most liquid companies in Turkey. Because financial companies dominate the Turkish market (with a combined weight of 45-65 percent weight), Finans Portfoy soon introduced a second fund, the Non-Financial Istanbul 20, offering investors access to large-cap companies from the industrial, telecom, petroleum and construction industries (among others).
The latest fund rounds out the coverage by introducing small-cap exposure, with heavy weightings of oil, construction and insurance stocks.
All three funds charge a management fee of 95 basis points, and were developed in partnership with Dow Jones and/or the American Stock Exchange.
Although the funds are listed on the Istanbul Stock Exchange, they are in large part targeted at foreign investors, who may be intrigued by the incredibly strong performance of the Turkish stock market. The DJ Turkey Titans Index rose 34 percent last year.