To be sure, a risk to both asset classes is further downward pressure on the euro given economists’ expectation of another rate cut from the European Central Bank later this year.
But for the reasons I cite above, going forward, I would stick with German stocks but lighten up on German bonds. Investors can access the German equities through the iShares MSCI Germany Index Fund, (NYSEARCA: EWG).
Source: Bloomberg
Russ Koesterich, CFA is the iShares Global Chief Investment Strategist and a regular contributor to the iShares Blog. You can find more of his posts here.
The author is long EWG
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