After surging in 2017, the Global X MSCI Greece ETF (NYSEArca: GREK) is off to another solid start this year. The lone exchange traded fund dedicate to Greek stocks is up more than 10% over the past month and nearly 8% since the start of 2018, but challenges linger for Greek equities.
Eurozone and emerging markets stocks are attractively valued relative to the U.S. and those discounts are evident with some of GREK’s holdings. That theme has been prompting investors to revisit the lone ETF trading in the U.S. that is dedicated to Greek stocks. Greece is classified as an emerging market.
“A turnaround in the job market (or more precisely, a slackening in the pace of job losses) signaled by the PMI can be traced back to 2013, which was swiftly followed by a steady fall in the official unemployment rate from 27.9% in July 2013 to 20.7% in October 2017,” according to IHS Markit data. “Job creation has been supported by labour market reforms, including a reduction in the minimum wage and suspension of automatic salary increases over this period.”
There are still some catalysts that could potentially help GREK rebound. Eurozone and emerging markets stocks are attractively valued relative to the U.S. and those discounts are evident with some of GREK’s holdings. That theme has been prompting investors to revisit the lone ETF trading in the U.S. that is dedicated to Greek stocks. Importantly, Greece’s finances are improving.