Italian banking stocks have also been improving since the December 5 low after Renzi announced he would resign following the referendum defeat on December 4, which also fueled heavy short covering and further bolstered prices.

Italy, the third-largest economy in the Eurozone behind Germany and France, could hold national elections later this year.

“EWI is quite heavily exposed to Financials & Energy, with well-known companies like ENI, Intesa SanPaolo, Unicredito and Generali. If populist, anti-European Union parties keep losing the elections, the prospects of the troubled banks will improve,” according to Seeking Alpha.

Alternatives to EWI include the the iShares Currency Hedged MSCI Italy ETF (NYSEArca: HEWI) and Deutsche X-trackers MSCI Italy Hedged Equity ETF (NYSEArca: DBIT), both of which are currency hedged ETFs.

For more information on Italy, visit our Italy category.