ETF Trends
ETF Trends

The iShares MSCI Poland Capped ETF (NYSEArca: EPOL) and the Market Vectors Poland ETF (NYSEArca: PLND) have been among the top-performing emerging markets ETFs not only over the past month, but since quantitative easing tapering talk first started in in May.

Since May 22, EPOL, the larger of the Poland ETFs, has jumped nearly 10%. PLND has rallied 11%. The funds have climbed on the back of constructive economic data that indicates the Polish economy, the European Union’s largest eastern economy, is gaining some steam. Poland’s purchasing managers index climbed to 51.1 in July from 49.3 in June, getting back into expansion territory. [Data Powers Poland ETFs Higher]

There has been another catalyst: A firm zloty. As currencies from Brazil to India to Indonesia to Turky wilt, Emerging Europe currencies, including Poland’s zloty, have stood tall. At the very least, the zloty, Czech koruna and Hungarian forint have been less bad than the real, rupee and rupiah. Emerging Europe currencies are getting a lift from improving economies throughout the Eurozone.

“Central and Eastern Europe’s unusual advantage was underscored Thursday, when data showed activity in the euro zone rose at the fastest pace in August for more than two years, a sign that economic recovery in the 17 nations that use the single currency is picking up steam,” reports Clare Connaghan for the Wall Street Journal.

Poland is currently the only member of the European Union to skirt the recession since 2009. The economy is expected to grow 1.1% this year, its slowest pace since at least 1997, but the zloty should be supported by the fact that Poland’s central bank said last month its rate-cutting campaign is over. [Poland ETFs Test 50-Day Line as Government Expands Stimulus]

Bolstering the bull case for the zloty and Poland ETFs is the country’s recently posted current account surplus. It is widening account deficits that have plagued the rupee, rupiah along with India and Indonesia ETFs.

“With euro-zone economic data proving upbeat, and no huge gaps in current accounts, Eastern European currencies such as the Polish zloty and even the often-maligned Hungarian forint are comparatively dull,” relative to other emerging markets currencies, according to the Journal.

Market Vectors Poland ETF

ETF Trends editorial team contributed to this post.

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.