Big Upside Seen for the Italy ETF

The financial services sector is EWI’s sector weight at 38.6%. Energy is next at 16.5%, the bulk of which is occupied by Eni (NYSE: E). Italy’s energy giant is EWI’s largest holding at a weight of 12.4%. Shares of Eni are up 13.8% in the past month, helping lift EWI to a 4.6% gain over that time. [Value With PIIGS ETFs]

“If the euro continues to weaken the EWI will underperform the FTSE MIB up 21.8% in Q1 2015 because of the strong dollar. This is in contrast to the 8.8% increase in EWI for Q1 2015, which highlights the importance of hedging the currency with these ETFs,” according to SIS.

Currently, there is not a dedicated euro hedged Italy available to U.S. investors. However, Deutsche Asset & Wealth Management filed plans for the Deutsche X-trackers MSCI Italy Hedged Equity Fund last year while a recent filing indicated BlackRock could launch the iShares Currency Hedged MSCI Italy ETF, the currency hedged answer to EWI.

iShares MSCI Italy Capped ETF