What France ETF Investors Need to Know About the Elections

France and Europe-related exchange traded funds have been on the market’s radar ahead of a closely watched election cycle, and may potentially offer an opportunity for investors ahead.

The iShares MSCI France ETF (NYSEArca: EWQ), the largest France exchange traded fund trading in the U.S., is up 7.1% year-to-date and has gained 1.2% over the past week.

French equities have remained relatively subdued in sideways action as the country heads toward its national election, which could decide the ultimately decide whether or not the country parts ways from the European Union or maintains the status quo.

On Sunday, April 23, French citizens will head to the ballots and pick their next president. The process involves a two round presidential election vote, with the first round taking place on Sunday with 11 different candidates. If no one makes out with an outright majority, which is likely the case, the top two popular picks will proceed to a runoff on May 7.

The front runners include Francois Fillon, a conservative center-right Republican; Benoit Hammon, a mainstream left-wing socialist; Marine Le Pen, the leader of the far-right National Front; Emmanuel Macron, an independent centrist; and Jean-Luc Melechon, the hard-left creator of the French Unbowed Movement.

The polls, though, project Macron and Le Pen to go head-to-head in the runoff. From the latest polling results, Macron, the center-right pro-EU candidate, leads with 23%, followed by Marine Le Pen, who has vowed to freeze immigration and end the Schengen agreement, at 22%, Fillon at 20% and Melechon 19%.

If Le Pen wins, the potential for a “Frexit” or French exit from the EU is a likelihood as she has vowed to renegotiate France’s place in the European bloc and voiced support for departing from the euro currency. However, even if Le Pen becomes president, she may find it hard to secure a majority in parliament, which further lowers the near-term risk of a Eurozone dissolution.