Belgium stocks have been quietly outperforming broader European equities. With the economy picking up steam, the country-specific exchange traded fund could further strengthen.
The iShares MSCI Belgium Capped ETF (NYSEArca: EWK) was up 1.8% Tuesday. EWK has gained 2.5% year-to-date, whereas the Eeuro STOXX 50 Index is down 0.2% so far this year. Over the past year, EWK increased 25%, compared to the Euro STOXX 50 gain of 13.6%. Anheuser-Busch InBev (NYSE: BUD) is EWK’s largest holding with a weight of 22.3%.
Belgium’s economy, the sixth-largest in the Eurozone, grew at a faster-than-expected 0.5% in the fourth quarter, the strongest expansion since the first quarter of 2011, reports Andrew Clapham for Bloomberg.
The economy was bolstered by stronger business investments, which rose 0.9%, and consumer spending, which increased 0.6%, over the fourth quarter. Additionally, business confidence touched a two-and-a-half-year high in February.
“Consumer spending rose at the fastest rate in three years and the same was true for business investments,” Steven Vanneste, an economist at BNP Paribas Fortis, said in the article. “Looking forward, the robust economic performance of Belgium is likely to last in 2014 as confidence indicators continue to improve.”
In comparison, economists estimate that the Eurozone bloc grew 0.3% in the fourth quarter. Official numbers will be released Wednesday, March 4.