Europe has been kicking our butts lately when it comes to exchange traded funds (ETFs) and their performances. But why? 

One reason could be the new wave of political reform across several European countries, including Germany, Sweden, Belgium and France. The newly-elected, center-right leaning leaders tend to drive bull markets, says Carl Delfeld of ETF XRAY. And although our market has hit new highs, so have the European markets.

In addition, Europe’s overall economy has been stronger than ours. Since the end of 2006, Europe’s GDP has outpaced America’s. The euro is at new highs against the dollar (today it reached $1.38) and the yen. Unemployment is down to 7%, which is the lowest it has been since the euro was created in 1999, according to The Economist.

Every dog has its day; it’s only a matter of time before the United States is in the lead again.

  • iShares MSCI Germany Index (EWG) – up 29% year-to-date
  • iShares MSCI Sweden Index (EWD) – up 21% year-to-date
  • iSHares MSCI France Index (EWQ) – up 17% year-to-date
  • iShares MSCI Belgium Index (EWK) – up 11% year-to-date


For full disclosure, some of Tom Lydon’s clients own EWG.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.