The true gem of the Europe ETF litter over the past 30 days has been the Global X FTSE Greece 20 ETF (NYSEArca: GREK). Back from the brink of expulsion from the Eurozone and a demotion by one index provider to emerging markets status earlier this year, Greek equities are in rally mode and that has helped GREK surge about 20 percent in the past month. [Greece ETF Bounces Back]
Even more so than EWP, GREK has benefited from plunging bond yields. In June 2012, Greek 10-years yielded around 30% while the Athens Stock Exchange General Index labored around 500. Fast-forward to May 2013, and the Athens Stock Exchange General Index closed above 1,000 and the yield on Greek 10-year bonds is down to 8.21%, according to Bloomberg data.
A double in the span of less than a year might imply GREK and Greek stocks do not have much further to rally, but consider this: The ASE traded above 4,000 less than five years ago and over 6,000 in 1999.
The risk is Greece is far from a sanguine market. The country is into a sixth year of recession and job growth is expected to be tepid for the foreseeable future. However, some progress is being as the European Commission is forecasting 0.6% GDP growth for Greece in 2014 and Fitch Ratings recently upgraded Greece’s credit rating to a higher part of junk territory. [Greece ETF Up 20% Since March; Fitch Lifts Credit Rating]
ETF Trends editorial team contributed to this story.