High-risk, high-reward countries for ETFs

Three of the worst performing single country ETFs in 2014 that may rebound next year providing a good investment opportunity for investors.

The Russia Market Vectors is the most heavily traded Russian ET. Andrey Rudakov / Bloomberg

Nigeria Global X ETF (NGE US)

Benefits: This ETF tanked 39 per cent this year – Nigeria's stocks collapsed in recent months as Africa's biggest oil exporter reeled from the drop in crude. Even though its currency has been sent spiralling, the country is Africa's largest economy and most populous country. Nigerian stocks now trade at a price-to-earnings ratio of 8. Watch out for: The state is battling the Islamist group Boko Haram, and corruption levels are among the highest in the world.

Greece Global X ETF (GREK US)

Benefits: This ETF, the only one dedicated to Greek stocks, tumbled 39 per cent this year. Greece's debt woes continue to weigh on its economy, with concerns about political stability hurting investor sentiment despite €240m in bailouts. Greek stocks trade at a price to earnings ratio of 11.7. Watch out for: The leftist party winning in elections if the incumbent prime minister, Antonis Samaras, fails to get support for his choice of president.

Russia Market Vectors ETF (RSX US)

Benefits: This exchange-traded fund dropped 40 per cent this year, making it among the cheapest single-country ETFs around by price-to-earnings ratio of about 4.5 per cent. This is the most heavily traded Russian ETF, and it includes stocks such as the state energy giant Gazprom and the country's biggest retailer, Magnit. Watch out for: A continued drop in oil prices, more sanctions and a further deterioration in the country's currency and economy.

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