ETF Trends
ETF Trends

There has been some renewed optimism recently in Germany’s equity market at least in terms of what we are witnessing in fund flows and related options activity.

Benchmark ETF EWG (iShares MSCI Germany, Expense Ratio 0.51%) has reeled in north of $80 million in recent sessions and we have also seen some play in the September 30 calls (ETF has a $29 handle currently). The fund has about $4.8 billion in assets under management and averages an impressive 4.4 million shares traded daily.

Decidedly mega/large cap slanted,(>85% of the portfolio resides in these caps) larger and very familiar multi-nationals populate the top holdings in the ETF like Bayer AG, BASF SE, Siemens AG, Daimler AG, Allianz SE, and SAP SE. The ETF has bounced nearly 5% off of its early to mid-August lows and remains in the forefront amid the recent ECB rate cuts.

There are several other Germany focused ETFs that along with EWG should remain on the dashboard of managers that have allocations to Europe and more specifically Germany itself, but every one of them is significantly smaller in asset size currently when compared to Germany.

HEWG (iShares Currency Hedged MSCI Germany, Expense Ratio 0.53%) only debuted in January of this year, but still has managed to pull in about $52 million in investor assets since inception. Daily trading volume in the name at about 5,800 shares remains light.

FGM (First Trust Germany AlphaDEX, Expense Ratio 0.80%) is a fund of similar size, with about $47 million in AUM, and of course employs the AlphaDEX methodology to the German stock market, ending up with a portfolio that has a notable mid-cap slant (about 52% of the index).

EWGS (iShares MSCI Germany Small Cap, Expense Ratio 0.59%) debuted in early 2012 but still has not caught on like its older brother EWG has. The fund has about $36 million in AUM and of course offers market cap weighted index exposure not to mega/large cap Germany as does EWG, but to the smaller cap segment of the country’s equity market.

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