Europe's worsening sovereign debt crisis is doing more than
sending Italian and Spanish yields soaring. Returns have lagged
for ETFs that track three of the four nations participating in
the semifinal round of the 2012 UEFA EURO Finals.
Many may question the correlation to football wins and equity
market performance. However, legitimate studies have
demonstrated the link
"For example, a loss in the World Cup elimination stage leads
to a next-day abnormal stock return of -49 basis points. This
loss effect is stronger in small stocks and in more important
games," according to the study "Sports Sentiment and Stock
Three of the four UEFA EURO semifinalists are undoubtedly
soccer blue bloods. Portugal, which has no ETF tracking it, has
picked up the quality of its international play in recent years.
Spain has won the last two major international competitions in
has participated in - the 2010 World Cup and UEFA EURO 2008.
Those two nations square off in one semifinal. The other match
is between Germany and Italy. Combined, those two countries own
seven of the 19 World Cup titles (Italy with four, Germany with
The worst result that the four sides have notched in UEFA EURO
this year has been a draw. Germany, the Eurozone's largest
economy, has won all four of its matches. However, the sovereign
debt calamity has thwarted any potential for the relevant ETFs to
iShares MSCI Germany Index Fund (NYSE:
As was previously noted, the Germans have looked nothing short of
impressive in advancing deep into yet another international
football tournament. Still, that has not benefited the iShares
MSCI Germany Index Fund. The largest Germany-specific ETF is down
about 3.1 percent since the tournament started. Other Germany
ETFs have fallen as well. The First Trust Germany AlphaDEX Fund
) is off nearly 1.7 percent since the start of the tournament
while the Market Vectors Germany Small-Cap ETF (NYSE:
) has given up just over 4 percent.
iShares MSCI Spain Index Fund (NYSE:
Spain's lone ETF has had a nightmarish
recent track record.
The fund could use any help it can get to move higher,
football-related or otherwise. Spain's footballers have not
looked overly impressive in UEFA EURO, but the team has not lost
and is on the brink of playing for another major title. The
market could care less. EWP has lost about 1.4 percent since the
iShares MSCI Italy Index Fund (NYSE:
Despite Italy's rich football history, expectations were low for
the Azzurri heading into this tournament. Some so-called experts
said the team would not advance beyond the group stage. The
problem for EWI is that expectations are low for Italy's economy.
Already in a recession, Italy is widely viewed as the next
Eurozone shoe to drop after Spain. Even if that does not happen,
EWI has lost roughly 5.3 percent since June 8.
Market Vectors Poland ETF (NYSE:
Poland has co-hosted 2012 UEFA EURO along with Ukraine, and while
the team's early exit from the tournament has left Polish
football fans disappointed, investors can take heart in a few
First, Poland still is not a member of the Eurozone. Second,
still has a better growth outlook than any of the
Finally, despite the fact that Poland is not among the
tournament's final four, Poland ETFs have reigned supreme. Since
June 8, PLND and the iShares MSCI Poland Investable Market Index
) have each returned about 6 percent.
For more on UEFA EURO and ETFs, click
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