“Rising interest rates are often seen as a positive driver for banks, along with a steeper yield curve — the spread between different bond maturities. According to Sanchez’s thinking, the ETF will rise if the banks do well by way of a rising rate environment. Additionally, Sanchez pointed out, the ETF carries a large exposure to Latin America, which also has a strengthening economic outlook,” reports CNBC.
Related: Spain ETF’s 26% YTD Surge is No Fluke
Investors can also consider the factor-based SPDR MSCI Spain Quality Mix ETF (NYSEArca: QESP) as an alternative to the cap-weighted EWP. The quality factor “captures excess returns to stocks that are characterized by low debt, stable earnings growth and other ‘quality’ metrics,” according to MSCI.
QESP is also heavily exposed to the financial services sector with a weight of 33.5% to that group. The factor-based Spain ETF also offers some leverage to the recovering Spanish consumer with over 10% of its weight going to consumer sectors. QESP is up about 20% this year.
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