It has been a rough start to 2014 for emerging markets exchange traded funds. The same can be said of some single-country Europe ETFs.
The Global X FTSE Greece 20 ETF (GREK) is proving defiant on both fronts. Remember that in 2013, three major index providers – Russell Investments, MSCI and S&P Dow Jones Indices – demoted Greece to emerging markets status. So like it or not, GREK is an emerging markets ETF. [Greek Stocks Headed to Emerging Markets Index]
That has not stopped the fund from jumping over 6% to start 2014 while staging an impressive technical breakout. GREK gained. GREK’s breakout gained momentum Thursday when the ETF gained 0.6% on more than double the average daily turnover on a lethargic day for U.S. stocks.
Up more than 16% in the past 90 days, GREK may not be down delivering upside.
“Volume has also confirmed the move, as turnover is already well above the 10-week moving average of volume,” said Deron Wagner of Morpheus Trading Group regarding GREK. “The consolidation starting from late October was pretty tight and shallow, giving back less than 33% of the last wave up (from late August to late October).”
GREK entered 2013 as one of the world’s least expensive markets on a CAPE basis and the ETF confirmed the value proposition of Greek equities, soaring almost 25% last year. [Inexpensive Global Markets Delivered]
“Whether this is a global rotation into the junkiest of the junk – betting on the inevitable rescue and intervention to keep everyone safe, or merely front-running an ECB QE effort as inflation tumbles – is unclear but it is worth noting that this is the best start to a year for Greek stocks since 1994,” according to Zerohedge.
Shares of National Bank of Greece (NBG), one of GREK’s holdings that trades in the U.S., is up 3.5% in the past five sessions. The stock is GREK’s fourth-largest holding with a weight of almost 7.4%.
Global X FTSE Greece 20 ETF
ETF Trends editorial team contributed to this post.
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.