The iShares MSCI Germany ETF (NYSEArca: EWG), the largest exchange traded fund tracking German equities listed in the U.S., traded higher Thursday, extending its year-to-date gain to nearly 7%, despite a bearish call on German stocks from a major bank.

Alternatives to EWG include the currency hedged iShares Currency Hedged MSCI Germany ETF (NYSEArca: HEWG), the Recon Capital DAX Germany ETF (NasdaqGM: DAX) and the Deutsche X-trackers MSCI Germany Hedged Equity Fund (NYSEArca: DBGR), which is also currency hedged.

In a note out Thursday, Deutsche Bank recommended selling German stocks, citing high price-to-book ratios and low dividend yields relative to other European markets.

“Assessed against the bank’s European country valuation scorecard, Germany had its largest underweight rating. German equities tend to struggle when European cyclicals underperform defensives, a situation the strategists predict is approaching,” reports Bloomberg. “The DAX Index is among the most cyclical of the region’s benchmarks and is priced for further positive euro-area macro-economic surprises, optimism that may have become stretched, they said.”

Showing Page 1 of 2