The iShares MSCI Spain Capped ETF (NYSEArca: EWP), the largest ETF tracking stocks in the Eurozone’s fourth-largest economy, was one of last year’s best-performing single-country Europe ETFs. This year, EWP is modestly higher, but the stage is set for the Spain ETF to generate more upside for investors.

Ebbing political volatility in Spain and some major improvements to local economic data are helping drive stocks there higher. Additionally, the bank-heavy EWP could benefit as Spain’s banks are viewed more favorably by global investors.

“Spain’s sovereign rating was raised one notch to Baa1 by Moody’s Investors Service, with a stable outlook, completing a full rating upgrade by all the main credit services,” reports Bloomberg. “The Spanish economy has entered its fifth year of expansion, showing a resilience to external shocks and political turbulence. The momentum has prompted the three major credit agencies to improve their rating in recent months, reflecting the change in fortunes for the kingdom.”

Related: A Eurozone Focused ETF With Promising Potential

Why Spain Is Poised With Potential

The $1.05 billion EWP tracks the MSCI Spain 25/50 and holds 23 stocks. Like many single-country ETFs, EWP is top heavy at the sector with financial services names accounting for 42% of the ETF’s weight. That is more than double the fund’s exposure to its second-largest sector weight, industrials.

Just two stocks – Banco Santander (NYSE: SAN) and Banco Bilbao Vizcaya (NASDAQ: BBVA) – combine for nearly 30% of the ETF’s roster.

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