The iShares MSCI Belgium Capped ETF (NYSEArca: EWK), often one of the steadier hands among single-country European exchange traded funds, is up 5.7% year-to-date and there could be more upside on the way for the only ETF tracking the sleepy central European nation.

EWK’s large allocation to food, beverage and staples stocks does mean the ETF is conservative in sector posture. Beer giant Anheuser-Busch InBev (NYSE: BUD) occupies a massive percentage of EWK’s weight, more than two and a half times the allocation given to the ETF’s second-largest holding. That has put EWK in focus in recent days as AB InBev has moved on rival SABMiller, the world’s second-biggest brewer.

Some market participants believe last month’s selloff created value in European stocks and that it may have been excessive, especially since most leading European indicators point to continued economic expansion. All the recent selling did was restore value to the European market. [Europe ETFs on the Cheap]

EWK’s large allocation to food, beverage and staples stocks does mean the ETF is slightly pricier than a broader measure of Eurozone stocks so last month’s Europe selloff brings relief on the valuation front for the Belgium ETF.

Adding to the bull case for EWK and Belgian stocks is increased political stability and modest economic growth.

“Belgium’s GDP growth measured 0.4% for the first two quarters of 2015, pretty much in line with the EU-28; Per capita GDP is 23% higher than the EU-28. Belgium does rank 15th in EU-28 unemployment, high, but below the EU-28 average. As an export economy, Belgium runs a positive balance of trade of about $3.07 billion; however, is a net borrower with a current account deficit of $1.827 billion. Lastly, wealth is well distributed as demonstrated by its GINI index of 29.9. In a nutshell, Belgium is reasonably well off nation with average growth and above average wealth distribution,” according to a Seeking Alpha post.

iShares MSCI Belgium Capped ETF

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.