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Even amid concerns about France’s national elections later this week, a June election in the U.K. and national elections slated for later this year in Germany and Italy, Europe exchange traded funds continue climbing.

Single-country ETFs dedicated to Germany, the Eurozone’s largest economy, are among the Europe ETFs making new highs.

The iShares MSCI Germany ETF (NYSEArca: EWG), the largest exchange traded fund tracking German equities listed in the U.S., rose 4.7% last week and is higher by 12% year-to-date as Germany’s benchmark DAX surges.

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.

“A furious 4-month, 20% rally had brought the index precisely to the level of its 2015 all-time highs just south of 12.400. How would the index react? As we noted in that prior post, “a reasonable reaction would be for the DAX to pause or consolidate its recent gains for some time prior to attempting a breakout to new highs.” This “speed bump” scenario is exactly what has unfolded in the DAX, at least for a few weeks,” reports ETF Daily News.

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.

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. Germany ETFs are likely to be responsive to the results of the May 7th election in France that will determine that country’s next president.

“So is it past the speed bump and on to the Autobahn for German stocks? In theory, it should be, at least in the intermediate-term. In the immediate-term, the new high was not decisive enough to say definitively that the former all-time highs were taken out. Therefore, we could still see some more brief backing and filling before the DAX takes off. Like much of Europe, though, a new up-leg in the DAX does appear to be a good bet,” according to ETF Daily News.

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

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