Last week, the iShares MSCI France ETF (NYSEArca: EWQ), the largest France exchange traded fund trading in the U.S., jumped 6.1% after it became apparent that centrist pro-European Union candidate Emmanuel Macron would face far right candidate Marie Le Pen in the May 7th runoff to determine the next French president.
EWQ is now up 13.6% year-to-date, making it one of the best-performing single-country developed markets ETFs. France, the Eurozone’s second-largest economy behind Germany, is a key component in diversified Europe ETFs. In dedicated Eurozone ETFs, France is usually the largest or second-largest country allocation. In diversified Europe ETFs that hold stocks from nations outside the Eurozone, France is usually among the three or four largest country allocations.
However, the expected French election outcome, that being Macron topping the controversial Le Pen, is benefiting some other single-country ETFs as well. For example, the Global X MSCI Greece ETF (NYSEArca: GREK) jumped 8.2% last week following the results of the first round of the French election.
“The reason: more big-nation protectionism in Europe could hurt growth prospects for weaker players. But centrist Emmanuel Macron is favored over Le Pen in the runoff election on May 7,” reports Dimitra DeFotis for Barron’s.