The Most Unloved ETF in the World Is Also One of the Cheapest

Gold is up nearly 50% over the past year, platinum group metals are tightening on mine supply constraints, and the world’s energy transition is creating demand for minerals that sit overwhelmingly under African soil. The one ETF that packages all of that into a single ticker, at a cost most investors would consider a rounding error, has spent most of its life being treated like a problem to avoid.

What EZA Is Actually Built to Do

iShares MSCI South Africa ETF (NYSEARCA:EZA) is a single-country equity fund that tracks the MSCI South Africa 25/50 Index, giving U.S. investors direct access to the Johannesburg Stock Exchange. It has been running since February 3, 2003, carries a 0.59% expense ratio, and holds $745 million in net assets. For a single-country emerging market fund, 59 basis points is genuinely low.

The return engine runs on three tracks: South African corporate earnings, commodity cycles, and the rand-to-dollar exchange rate. The rand currently trades at roughly 0.06 per U.S. dollar, and every tick of that exchange rate flows directly into EZA’s price for American holders. The fund carries no meaningful currency hedge, meaning currency risk is not a side note but the mechanism itself.

The portfolio concentrates heavily on two areas. Gold miners AngloGold Ashanti (NYSE:AU | AU Price Prediction) and Gold Fields (NYSE:GFI) together account for roughly 21% of the fund, while platinum group metal producers add another 13%. South African banks then fill out the balance. This is a concentrated bet on South African resources and financial services, not a diversified emerging markets play.

The Returns Are Real, But So Is the Volatility

EZA has delivered 60% in 2025, driven by cheap valuations and strong earnings from mining and financial holdings. Over the past year, the fund has been up 75%. Over ten years, it has returned 120%. This is only due to the recent surge that has happened after 2025. Before that, EZA was one of the most unloved ETFs.

The tension is that EZA earned those returns while carrying structural headwinds that never fully disappear. South Africa’s electricity crisis, corruption at Eskom, political noise from the ANC-DA-MK coalition, and currency risk are not small concerns. One analyst at AMO Research rated EZA a “Hold” and recommended waiting for a 10% price drop, citing concentration and macroeconomic risk. The fund’s recent history illustrates the whipsaw: up 6% in a single week recently, yet only up about 5% year-to-date.

The Three Tradeoffs Worth Understanding

1. Currency exposure with no hedge: The rand’s weakness alone has historically eaten the returns of foreign investors alive. When the rand depreciates, U.S. holders lose ground even if South African shares hold steady. The rand’s nominal effective rate has already moved up 6% recently, and prediction markets see inflation potentially rebounding to 4% or higher in Q2 2026, which keeps pressure on the currency outlook.
2. Concentration that compounds risk: The top three holdings represent roughly 32% of the fund. Naspers, the third-largest position at 10%, derives most of its value from a stake in Tencent, meaning EZA’s South Africa exposure carries embedded China technology risk that most investors do not expect.
3. Political and governance uncertainty: South Africa’s coalition government has introduced policy unpredictability. The 2024 general election marked the first time the ANC potentially lost its parliamentary majority since the end of apartheid, and that structural shift is still working through the system.

Why the “Unloved” Label Still Applies

EZA is sitting on resources the world desperately wants as the energy transition accelerates and geopolitical risk premiums stay elevated. Platinum group metals are critical to hydrogen fuel cells and catalytic converters, and South Africa holds the world’s largest known reserves. Gold, already up 47% over the past year, remains the dominant safe-haven asset in an era of elevated geopolitical tension. Yet EZA still trades at valuations analysts describe as cheap, and Reddit sentiment data is effectively nonexistent, reflecting how little retail investor attention the fund attracts.

The fund’s portfolio turnover of just 0.2 signals that the index itself barely moves, keeping transaction costs low but preventing the portfolio from adapting quickly to changing conditions inside South Africa.

Anyone expecting smooth returns or income consistency won’t end up happy. The currency swings alone can shift total returns by double digits in either direction.