Though many markets have been very choppy over the past few months, a handful have managed to breakout of this malaise and find their footing. In fact, during recent trading, three country ETFs actually hit fresh 52 week highs, suggesting that they are definitely moving in the right direction, despite some serious concerns about the global economy.
This may mean that these funds are a bit uncorrelated to the broader economy, and that they may be better positioned to deal with the ups and downs of the current volatile investing environment. So, some might be excellent selections for global investors at this time. Below, we profile these three nations which are seeing their funds surge to 52 week highs, and what their positive momentum as of late has been:
The Israeli market is best represented in ETF form by the iShares MSCI Israel Capped Investable Market ETF (EIS). This fund tracks a basket of about 55 stocks in the nation and it currently holds just over $100 million in assets.
The product is targeted on financials and health care, as these two segments make up just over half of the portfolio combined, while basic materials and real estate round out the top four. Teva Pharma (TEVA) dominates the portfolio with just under 24% of assets, while two banks take up the next two spots in the fund.
EIS hit its 52 week high of $52.18/share on Wednesday, representing a gain of about 19.2% in the past one year time frame. While this has slightly underperformed the S&P 500 in the same time period, investors should note that EIS has trounced SPY in the past three months, adding over 9.2% compared to 3.4% for the top American benchmark (see all the Africa Middle East ETFs here).
One of the key reasons for this concentrated fund’s run of outperformance is definitely TEVA. The stock—which is roughly one-quarter of EIS—has gained more than 26% in the past three months, propelling the Israel ETF to a big gain. And considering that TEVA currently has a Zacks Rank #2, we could see more gains out of this stock, and thus EIS, in the near future.
New Zealand isn’t exactly a hotbed of ETF activity as really there is only one choice targeting the space right now, the iShares MSCI New Zealand Capped ETF (ENZL). The fund targets 30 stocks from the nation, and it has just under $170 million in assets under management.
This fund is pretty well spread out, as no single sector accounts for more than 20% of the total. Instead, six segments receive weights of at least 10% in the basket, suggesting solid diversification from that perspective (See 3 Global ETFs for a Diversified Portfolio in 2014).
ENZL recently hit its 52 week high of $42.83/share, and the fund has moved higher by about 18.7% in the past one year time frame. Again, this is a bit light compared to the S&P 500, though the real run for ENZL has come in the past three months.
In that time frame, ENZL has shot up more than 15%, a huge contrast to the S&P 500’s gain of less than 4% in the same period. A big reason for this move was some hope for the New Zealand economy, and the stronger kiwi dollar which is right around its own 52 week high.
Part of this strength is due to the New Zealand central bank and their rate increase. This made New Zealand one of the first developed market countries to raise rates at this time, and it signals that, unlike most developed markets, the New Zealand one can take a rate hike, suggesting broad strength in the small economy (see Rate Hike Puts New Zealand ETF in Rare Company).
Although Greece has faced some very dark days in recent years, some stocks in the economy appear to be back on track to some extent. This is especially true when investors look to the Global X FTSE Greece 20 ETF (GREK), which is a fund that has built up assets of just over $250 million and follows 20 stocks focused on Greece.
GREK is heavily focused on a few names, as all of the top three holdings make up over 10% of the total assets. Still, exposure across sectors is surprisingly diverse, as four segments make up at least 14% of assets, while three more receive weights of at least 9% each.
This fund has seen a big range over the past 52 weeks, going from $14.11/share to its current level around the high of $25.72.share. And from the year ago period, the fund has moved higher by over 60%, though unlike the others on the list the recent move wasn’t the main cause (though the 15% bump in the past three months certainly helped).
A big part of GREK’s revival is the broader European recovery, and the fact that Greece has taken a step back from the abyss. With a stronger Europe and reduced debt concerns, many investors have bought up cheap Greek stocks over the past few months, helping funds like GREK immensely (see Why PIIGS ETFs Are Outperforming).
So for the case of Greece, it could be some bargain hunting, and broader interest in the European stock market once more. It is hard to tell if these gains can continue, though it should be noted that GREK has gained over 75% since inception, though the country’s market is still very far depressed from the pre-recession levels.
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