Germany ETFs Reach an Important Juncture

When investors think of stability among Eurozone economies and exchange traded funds, thoughts often drift to Germany, the region’s largest economy, and ETFs such as the iShares MSCI Germany ETF (NYSEArca: EWG).

Currently, Germany’s benchmark DAX Index is nearing an important technical juncture.

The DAX, or Deutscher Aktienindex, is comprised of 30 largest and most liquid companies on the German equities market. The companies make up about 80% of Germany’s stock market capitalization.

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The index is heavy on industrial, materials, financial services and consumer discretionary stocks, giving German stocks plenty of leverage to the weak euro theme. Germany is the Eurozone’s largest economy and its top exporter.

According to JPMorgan Asset Management, the European stock market has gotten too cheap to resist, with valuations on the MSCI Europe ex-UK Index and the FTSE All-Shares Index at attractive valuations when their price-to-earnings ratios are adjusted for inflation over the past 10 years, reports Aleksandra Gjorgievska for Bloomberg.


Adjusted for inflation, the MSCI Europe ex-UK Index traded at 15 times earnings at the end of June, compared to its long-term average of 19.4 since the 1980s. The FTSE All-Share Index was trading at 12.3 times earnings, compared to a mean of 17.