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ETF Chart of the Day: Going With Germany


EWG (iShares MSCI Germany, Expense Ratio 0.51%) calls have been active lately, specifically the December 29 line as the ETF has fallen back a bit from late October highs. The fund has pulled in more than $700 million year to date in fresh new assets and now has a total AUM of $5.44 billion.

EWG has an undeniable mega/large cap slant (about 87% of the portfolio exposure resides in mega/large caps) and top end exposure to Bayer AG (8.83%), BASF (8.56%), Siemens AG (8.22%), SAP AG (6.81%), and Allianz SE (6.45%). All of these names are multi-nationals and well-known brands not only in Germany and across Europe, but with the typical American consumer in most cases nowadays.

There are several other ways to play Germany via ETPs currently, although none of the strategies even come close to EWG’s massive $5.48 billion in assets under management. iShares debuted EWGS (iShares MSCI Germany Small Cap, Expense Ratio 0.59%) in early 2012 to access the German Small Cap Equity market, and that fund has raised about $25.4 million since inception.

First Trust brought the AlphaDEX methodology to the German equity space in 2012 as well with FGM (First Trust Germany AlphaDEX, Expense Ratio 0.80%). “Hedged Equity” has also become a concept here, although the funds still have not attracted a meaningful amount of assets up to this point. DBGR (DB X-Trackers MSCI Germany Hedged Equity, Expense Ratio 1.04%) and DXGE (WisdomTree Germany Hedged Equity, Expense Ratio 0.48%) are the two alternatives in this space currently, with a combined $21 million in AUM.

GERJ (Market Vectors Germany Small Cap, Expense Ratio 0.55%) entered the space in early 2011 and still remains very small in terms of fund size ($5.9 million in AUM).

On the fixed income front, two funds exist although neither has seen much attention yet and remain rather small. GGOV (ProShares German Sovereign/SubSovereign, Expense Ratio 0.45%) and BUND (PIMCO Germany Bond Index ETF, Expense Ratio 0.45%) come to mind but both funds are still rather lightly traded and evade the radars of most institutional money managers apparently.

iShares MSCI Germany ETF

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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