Vanguard FTSE Europe ETF (VGK) was actually higher in the holiday-shortened U.S. session Wednesday despite concerns that Portugal may put Europe’s sovereign debt crisis back on the front burner.
“Having won praise for taking tough measures to restore the financial health of the eurozone state, Portugal’s government has been rocked this week by the resignation of two ministers who quit because of waning public support for its program of austerity,” CNNMoney reports.
VGK was fractionally positive on Wednesday while iShares MSCI Spain (EWP) was off 0.2% at last check.
However, bond yields on Portuguese government bonds did spike on Wednesday.
“The sharp movements in bond yields we are seeing this morning highlight the fact that investors were not expecting this political turmoil in Portugal,” said Nicola Marinelli at Glendevon King Asset Management in a WSJ.com report. “If this political instability can happen in Portugal, then investors must be aware it can happen in other euro-zone countries.”
So far this year, VGK is up about 1% after a 4% decline the past month.
Vanguard FTSE Europe ETF (VGK)
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.