Investors have taken note of the plethora of diversified Europe exchange traded funds that are soaring this year.
That is a good idea as improving economic data and valuations that are still seen as cheap compared to U.S. stocks have some market observers, including major global banks, forecasting further upside for European stocks in 2014. [10 Great Diversified Europe ETFs]
For investors willing to incur some country risk, opportunities remain with some single-country Europe ETFs, many of which have turned in stellar performances this year.
As we discovered last month when we highlighted the 10 best global equity markets that have a corresponding U.S.-listed ETF, four of the funds on that list were Europe funds and three offer exposure to Eurozone nations. [10 Best Global Markets by ETFs]
Had that list been expanded to say 15 or 20, the number of single-country Europe funds would have risen as well. But do not fret because what follows is a list of the 10 best country-specific Europe ETFs to this point in 2013.
iShares MSCI Netherlands ETF (NYSEArca: EWN)
YTD gain: 24.3%
AUM: $302.9 million.
Comment: As the returns indicate, EWN has delivered an impressive 2013 performance, but how the ETF finishes the year will be an interesting scenario to watch. Interesting because on the last trading day of November, Standard & Poor’s ratings firm trimmed the Netherlands’ credit to AA+ from AAA due to “less promising” economic prospects and slower growth than other European countries, Financial Times reports.
iShares MSCI Germany ETF (NYSEArca: EWG)
YTD gain: 24.6%
AUML $5.8 billion
Comment: Stocks in the Eurozone’s largest economy have been impressive as well this year and there could be more upside on the way for EWG, the largest Germany ETF, because of helpful seasonal trends. EWG is not currency hedged, but investors have options on that front, including the db X-trackers MSCI Germany Hedged Equity Fund (NYSEArca: DBGR) and the WisdomTree Germany Hedged Equity Fund (NasdaqGS: DXGE). [Germany ETF a Compelling Seasonal Play]
iShares MSCI Spain Capped ETF (NYSEArca: EWP)
YTD gain: 25.1%
AUM: $807.4 million,
Comment: EWP, one of the more speculative and volatile single-country Europe ETFs on the market. Those traits stem from Spain’s status as the “S” in the infamous PIIGS acronym and the Eurozone’s highest unemployment rate. Standard & Poor’s raised Spain’s outlook Friday to stable from negative but kept the country’s rating at BBB-, a notch better than speculative, junk status, the Wall Street Journal reports.
First Trust Switzerland AlphaDEX Fund (NYSEArca: FSZ)
YTD gain: 25.5%
AUM: $25.7 million
Comment: FSZ follows a “smart-beta,” “enhanced” index methodology, which tracks Swiss companies based on growth factors, “including 3-, 6- and 12-month price appreciation, sales to price and one year sales growth, and separately on value factors including book value to price, cash flow to price and return on assets, according to First Trust.
Global X FTSE Greece 20 ETF (NYSEArca: GREK)
YTD: 27.9%
AUM: $112.5 million
Comment: In a testament to just how strong GREK has been this year, the ETF has surged nearly 28% despite three index providers demoting Greece to emerging markets from developed market status. And despite all that upside for Greek stocks in 2013, the country still ranks as one of the world’s cheapest, developed or emerging, on valuation. [Some High-Flying Country ETFs are Still Cheap]
iShares MSCI Germany Small-Cap ETF (NYSEArca: EWGS)
YTD gain: 30.6%
AUM: $27.8 million
Comment: There is a theme emerging here and it is Germany has been a major contributor to the upside in European stocks this year. Additionally, it is apparent that German small-caps have contributed to that upside. EWGS holds 107 stocks and allocates 33.6% of its weight to industrials, more than twice the weight allocated to technology, the fund’s second-largest sector weight. [Germany ETFs Rises as DAX Challenges New Highs]
iShares MSCI United Kingdom Small-Cap ETF (NYSEArca: EWUS)
YTD gain: 30.6%
AUM: $22 million
Comment: U.K. ETFs will be worth watching in the year ahead after GDP in the third quarter expanded at its fastest clip in three years. However, what will really have U.K. ETFs in the spotlight is the Bank of England’s monetary policy. Cable could strengthen on an improving economy and the Bank of England’s more tolerant stance for a stronger exchange rate, bolstering United Kingdom-related exchange traded funds. [A Spot of Tea With U.K. ETFs]
iShares MSCI Denmark Capped ETF (BATS: EDEN)
YTD gain: 33.6%
AUM: $17.2 Million
Comment: EDEN and for that matter, Danish stocks in general, do not get much attention from U.S. investors, so it is not a stretch to say this ETF’s almost 34% year-to-date gain is of the quiet variety. Quiet or not, Denmark is still part of a dwindling number of countries that have an AAA credit rating. Investors should note EDEN is a de facto health care ETF with a 38.3% weight to that sector and a 21.7% allocation to Novo Nordisk (NYSE: NVO).
iShares MSCI Finland Capped ETF (BATS: EFNL)
YTD gain: 34.1%
AUM: $15.3 million
Comment: Finland has an AAA credit rating, something not many other Eurozone members can say. Finnish stocks, as a group, are the third-best performers in the developed world this year behind Japan and fellow Eurozone member Ireland, outpacing the U.S. and other Nordic countries. [Flirting With Finland…The ETF]
iShares MSCI Ireland Capped ETF (NYSEArca: EIRL)
YTD gain: 40.9%
AUM: $119 million
Comment: The Ireland ETF has generated phenomenal gains this year as the country recovers from the Eurozone financial debt crisis. The economy has strengthened enough to wean itself off the Eurozone and International Monetary Fund bailout program. EIRL has hauled in almost $59.5 million of its $119 million in AUM this year. [Ireland ETF Outperforms as Country Exits Bailout]