Economic Data Supports Upside for Germany ETFs

The iShares MSCI Germany ETF (NYSEArca: EWG), the largest exchange traded fund tracking German equities listed in the U.S., is up 14.3% year-to-date and data out of the Eurozone’s largest economy indicate more upside could be coming for German equities.

Improving economic conditions and strengthening company earnings in Europe are signals that diversified exchange traded fund investors should keep in mind when looking for areas of potential growth after a multi-year run in U.S. markets leaves less opportunities at home.

With regards to Eurozone politics, France just completed its widely watch national elections, but Germany and Italy, the Eurozone’s third-largest economy, hold elections later this year.

“Germany’s first-quarter GDP highlights the key factors that are contributing to a persistent and broad-based economic recovery in the eurozone,” said Fitch Ratings. “German GDP rose 0.6% quarter on quarter in 1Q17, the Federal Statistics Office said today. The seasonally and calendar-adjusted annual increase was 1.7%. Provisional data showed that continued increases in household and general government consumption, rising foreign trade, and a jump in capital formation helped by a mild winter boosting construction, all contributed.”