Unlike the fall of 2012, 2013 has seen a definite turnaround in
the European economy. The latest economic indicators for the region
signal that the economy is slowly picking up.
European consumer and business confidence are rising, indicating a
new era of growth for the continent. In fact, the confidence
indicator in September managed to maintain its upward trend, with a
two-year high set in August (Read:
Play a Resurgent Europe with These ETFs
The economy is experiencing rising GDP forecasts for 2013 and 2014
as well. The economic outlook for France, Germany, Greece,
Portugal and Spain are improving. The re-election of Chancellor
Angela Merkel of Germany has also helped to restore political
stability in the region considering that Germany is the largest
economy in the EU.
The bailout packages by the International Monetary Fund (IMF) and
EU have saved the Grecian economy from deteriorating further. The
economy is approaching the close end of stabilization and 2014 is
expected to mark the first year of growth since 2007.
The government expects its economy to grow about 0.6% in 2014,
bringing the six-year darkness of recession to a gradual end (Read:
3 Cyclical ETFs for an Improving Economy
Moreover, based on
from the Bank of Spain, the Spanish economy grew 0.1% during the
third quarter. The positive figure suggests a surprising end to the
two-year recession, marking the first quarterly growth in over two
Given these improving trends, there is a "feel-good factor "about
the European region. And this is further corroborated by the fact
that some of the worst performing markets have led the upswing this
past one month.
The surge in these markets is expected to continue at least for the
rest of the year and could be worth a look for investors keen to
bet on European investments heading into the end of 2013 (See
all the European Equity ETFs
Below, we have highlighted the top three country ETFs from the
continent, which have been the star performers in the last four
weeks. Interestingly, these European ETFs have delivered
double-digit returns over the last one month, beating out the
S&P 500, as well as the broad European ETFs like
Vanguard FTSE Europe ETF
iShares MSCI EMU ETF
The Global X FTSE Greece 20 ETF (
Surprisingly, the best performer among the European ETFs comes from
Greece. Investors can consider betting on the economy with
The Global X FTSE Greece 20 ETF
(GREK). The fund has gained around 22% over the last 4 weeks,
suggesting that a strong positive shift in Greece is at hand.
Greece ETF on the Rise, Can It Continue?
The product tracks the FTSE/ATHEX Custom Capped Index and manages a
small asset base of $84.3 million. The ETF has heavy exposure to
the top three firms - Coca Cola HBC AG, Hellenic Telecom and Opap
S.A. - that collectively make up 30% of total assets. The fund
charges a fee of 65 basis points on an annual basis.
The product is also focused from a sector perspective, with
Consumer Defensive (20.44%), Consumer Cyclical (18.54%) and
Financial Services (15.15%) taking the three biggest spots. The
fund charges a fee of 69 basis points on an annual basis.
iShares MSCI Spain Capped ETF
Spain can be played with EWP, an ETF that primarily invests in
large and mid-cap Spanish stocks. The fund has enriched investors'
portfolio with over 12% returns in the last one month, while adding
around 40% in the last one year.
This noteworthy performance has been driven by its holdings
breakdown, which is heavily skewed towards Financial Securities.
Two of its top three financial holdings - Banco Santander and BBVA
-account for 33% of its total assets.
The fund provides ample liquidity with an average volume of
approximately 0.6 million shares per day and charges investors a
decent fee of 52 basis points a year (see
Why PIIGS ETFs Are Outperforming
iShares MSCI Italy Capped ETF (
To target the market of Italy, investors can choose this ETF which
holds over two dozen Italian stocks and charges investors 52 basis
The product is highly concentrated in its top ten holdings which
together make up around 64% of the fund assets, while its top pick
alone takes up 17.8% of the fund.
The fund is heavy on Financials (31.69%) and Energy (22.41%), while
sectors such as Utilities, Industrial and Consumer Discretionary
also have double-digit exposure in the fund.
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ISHARS-ITALY (EWI): ETF Research Reports
ISHARS-SPAIN (EWP): ETF Research Reports
ISHARS-EMU IDX (EZU): ETF Research Reports
GLBL-X/F GREC20 (GREK): ETF Research Reports
VANGD-FTSE EUR (VGK): ETF Research Reports
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