ETF Chart of the Day: Germany
May 17th 2012 at 12:53pm by Paul Weisbruch, Street One Financial
In recent sessions the Eurozone drama surrounding Greece has dominated news headlines, and thus many ETFs that are related to single countries in Europe have been exceptionally active.
We have seen asset inflows in the past few sessions in iShares MSCI Germany (NYSEArca: EWG), despite the wholesale sell-off in not only European based equities but throughout world markets during the month of May.
EWG, although it is trading currently at its lowest levels since early January of this year, and it has all but erased any 2012 gains at this point, has attracted more than $200 million in new assets via creation activity (approximately 8% of the assets outstanding in the fund).
Year to date, EWG has out-performed a broader European proxy, Vanguard Europe (NYSEArca: VGK), posting a gain of 5.62% versus VGK losing 1.26%. And if we go back five years and examine rolling returns, EWG is down 35.46% versus VGK losing 45.93%, so showing excess return of more than 1000 basis points. [German Bond ETFs: Yields Hit Record Low]
Many pundits have continually pointed to Germany as being the strongest hand in the Eurozone, and any buyers at these levels are likely making a valuation bet that the country is attractively priced and thus oversold due to exogenous pressures from other European countries, namely Greece and Spain for instance. [Dollar ETF Rally Reveals Market Fear, Risks]
EWG is reasonably balanced across various industry sectors, with sector weightings listed as follows: Industrials (17.97%), Consumer Discretionary (17.70%), Financial Services (16.62%), Basic Materials (11.64%), Healthcare (10.75%), Technology (8.36%), Utilities (7.37%), Communication Services (3.98%), and Consumer Staples (3.31%). Top holdings in the fund are currently, SIE (9.20%), BASF SE (8.91%), SAP AG ADR (7.13%), Bayer AG (6.45%), and Daimler AG (6.06%).
iShares MSCI Germany