Up more than 20% this year, the iShares MSCI Ireland Capped ETF (NYSEArca: EIRL) has clearly been one of the best performers among developed market single-country exchange traded funds, but even with that impressive, the lone Ireland ETF offers upside potential in 2016.
Two years ago, Ireland need an 85 billion euro, or $115.5 billion, bailout after its largest banks collapsed in 2010 during the so-called Eurozone financial crisis. The bailout also came with stringent austerity measures to make sure the economy stayed on course. However, the economy there and EIRL have thrived since then. [Ireland ETF Quietly Outperforms Other Developed Markets]
“EIRL produced an annual average gain of 20.7% over the past three years and 17.3% over the past five years. It outpaced virtually every international ETF in those periods,” reports Investor’s Business Daily. “Irish stocks often feature on IBD’s Global Leaders, a list of top-notch world stocks. These are companies that rate highly on earnings and sales growth, price momentum and return on equity, among other metrics.”
Ireland’s economic growth is expected to be 5% to 6% this year, which easily tops the broader Eurozone average.
Ireland’s economic renaissance has the economy there larger than at the height of its so-called Celtic Tiger boom. Ireland’s central bank pointed to support from domestic demand as robust retail sales and an improved labor market bolstered the economy.
“Ireland’s performance over the past four years stands in stark contrast to its peripheral peers in the euro zone. Portuguese stocks are down about 12 percent, equities in Italy are up 32 percent, and Spain’s are up 15 percent. Unsurprisingly, debt-ridden Greece has been the worst performer, down 33 percent since the debt crisis,” according to Bloomberg.
EIRL, home to $168.7 million in assets under management, devotes about 51% of its combined weight to materials and consumer staples stocks with the financial services and industrial sectors combining for a third of the ETF’s weight.
iShares MSCI Ireland Capped ETF
