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Europe Country ETFs to Weave Around EU Growth Cuts

Now that the European Commission cut its outlook on the Eurozone, European market investors can use country-specific exchange traded funds to target areas of potential strength.

The EU commission downwardly revised the gross domestic product in the 18-country Eurozone to expand 0.8% this year from its early forecasted 1.2% expansion, reports Gabriele Stenhauser for the Wall Street Journal. In 2015, the Eurozone economy is expected to grow 1.1%, downwardly revised from 1.7%.

The revised expectations were lowered due to diminished growth and low inflation, or stagflation, notably among the largest members, including Germany, France and Italy. The commission also warned that weaker emerging markets, lower demand and investment in Europe, an end to the Federal Reserve’s bond-buying program, and the negative effects of austerity measures will continue to weigh on the economy. [At Least European Dividends are Rising]

Looking ahead, Finland, Italy and France will be the slowest economies next year, with Finish economy expanding 0.6% in 2015, Italy growing 0.6% and France expanding 0.7%.

Traders who want to monitor the respective markets can watch the iShares MSCI Finland Capped ETF (EFNL) , iShares MSCI Italy Capped ETF(EWI) and iShares MSCI France ETF (EWQ) . Year-to-date, EFNL has dipped 2.4%, EWI fell 5.6% and EWQ decreased 9.4%.

On the other hand, Ireland and Greece are expected to generate the most growth in 2015, with the Irish economy expanding 3.6% and Greek economy growing 2.9%. Additionally, Greece is expected to make a decent turn around next year from a 0.6% GDP growth this year.

Investors interested in these two markets can take a look at the iShares MSCI Ireland Capped ETF (EIRL) and Global X FTSE Greece 20 ETF (GREK) . Year-to-date, EIRL fell 6.0% and GREK declined 28.4%. [Political Risks Pressure Greece ETF]

The broader European economies, which include 28 European countries, is expected to grow an average 1.3%, downwardly revised from 1.6%.

For broad Europe market exposure, ETF observers can monitor the Vanguard FTSE Europe ETF (VGK) . VGK is down 5.8% year-to-date.

Outside the union, the United Kingdom economy’s growth was upgraded to 3.1% from 2.7% for 2014 and the country is expected to expand 2.7% in 2015. The iShares MSCI United Kingdom ETF’s (EWU) fell 5.7% year-to-date.

For more information on Europe, visit our Europe category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, 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.