Stories and images of the Egyptian uprising have flooded our television screens and newspapers. As we wait anxiously for the outcome of the revolt in this authoritarian state, there is a way to attempt to profit from the action through an exchange-traded fund that offers exposure to Egypt.

The Market Vectors Egypt Index ETF (EGPT) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Egypt Index. The Index provides exposure to publicly traded companies that are domiciled and primarily listed on an exchange in Egypt or that generate at least 50% of their revenues in Egypt. In exceptional cases, companies with less than 50% of their revenues derived from Egypt may be eligible for inclusion in the Egypt Index. As a result, EGPT is subject to the risks of investing in this now-volatile Middle Eastern country.

Certainly, you face substantial risks if you choose to invest in Egypt as public protests continue each day against the regime of its President Hosni Mubarak. But opportunity exists for investors, too. I am not alone in viewing Egypt as a place where investors potentially can profit in the weeks and months ahead.

My friend Nicholas Vardy, who writes the monthly investment newsletter Global Stock Investor and the weekly trading service Global Bull Market Alert, wrote about the political crisis in Egypt in his Feb. 1 Global Guru article and featured EGPT as one of five investments that could be used to profit from the upheaval in that country. History has shown that countries that are battered ultimately can rebound strongly. If you can buy at a drastically reduced price when a crisis hits, you stand a good chance of profiting when a recovery follows.

One complication with EGPT is that the Egyptian Stock Exchange has remained closed since Monday, Jan. 31, and the fund was forced temporarily to suspend the creation of shares, even though “shares continue to trade hands on the secondary market,” according to The Wall Street Journal. For now, I recommend staying on the sidelines to see what happens when the Egyptian Stock Exchange opens this Sunday, as currently planned.

A reason for caution arose Monday when the Egyptian pound fell to its lowest level in six years against the dollar to show that investors are anxious about the country’s political instability and the implications for the country’s economy. Monday marked the first time that international investors were able to cut their exposure to Egyptian assets after the country’s financial institutions closed on Jan. 27, in the wake of the public unrest.

A second reason for caution is that the fund, which was launched just a year ago, typically has an average trading volume of less than 100,000 shares. I like to see a fund generate an average trading volume of at least 100,000 shares a day, so EGPT is not quite up to my standards yet for liquidity to ensure you can buy and sell shares at fair prices easily each day.

On the plus side, trading volume at one point during the past couple of weeks topped 1 million shares. And surprisingly, the relatively high volume did not reflect mass selling. In fact, at the close of market on Feb. 8, the price of EGPT was $18.05. That’s more than 11% higher than its low on Jan. 28 and only 4% lower than the price of the fund the day before the riots began on Jan. 25. The increased price of the shares shows that EGPT is capable of a rebound. Further evidence of investor faith in Egypt is that EGPT currently is trading at nearly an 11% premium to its Net Asset Value (NAV).

As you can see by the chart below, EGPT incurred a major dip at the outbreak of the riots. However, you can also see the resilience of the fund and its ability to bounce back. This fund is for investors who are willing to take a risk, but the potential for rewards in the future is big.

For advice about which ETFs to buy and to sell, I urge you to sign up for my ETF Trader service. As always, I am pleased to answer any of your questions about ETFs, so don’t hesitate to contact me if you have one. To send a question to me, simply click here. You may just see your question answered in a future ETF Talk.