With its heavy tilt toward large, multi-national companies, the DAX index benefits from depreciating euro currency. A weaker euro would help support export growth and potentially generate greater revenue from overseas operations for the multi-nationals.

“The quarterly GDP growth is slightly higher than Fitch’s forecast of 0.5% in our March Global Economic Outlook and highlights several trends that underpin the eurozone’s cyclical recovery. Improving labour markets provide a key support to household consumption growth. (Away from Germany, flash estimates on Friday showed that French non-farm payroll employment increased for an eighth consecutive quarter.) The pick-up in global growth remains on track and we forecast global growth at 2.9% this year from 2.5% in 2016. Loose monetary policy is feeding through to rising bank credit to the private sector and contributing to the strength of the German housing market, where orders for new buildings are growing,” notes Fitch.

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. DAX, the ETF, is the only U.S.-listed ETF that is a pure DAX index tracking fund.

For more information on hedged options, visit our currency hedged ETFs category.