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Prodigious PIIGS: These ETFs Soar, Gain Assets


Exchange traded funds tracking European equities have endured a modest pullback in recent weeks, but data support the notion that investors still see opportunity with these funds.

For example, the Vanguard FTSE Europe ETF (VGK) has taken in more than $2 billion in new assets this year, making it the most prolific asset gatherer among all ETFs. The iShares MSCI EMU ETF (EZU) has impressed as well with nearly $1.7 billion in 2014 inflows.[Europe ETFs Take a Break]

Some single-country Europe ETFs are sporting the alluring combination of robust inflows and stout returns, namely those funds tracking the once downtrodden PIGS nations.

“ Miss PIGSy Gets Her Frog.  Exchange Traded funds focused on Portugal, Italy, Greece and Spain are pulling in assets, to the tune of $1.0 billion year-to-date.  That’s especially impressive considering their total asset under management are just $3.1 billion,” said Nicholas Colas, chief market strategist at ConvergEx Group, a global brokerage company based in New York, in a note published Friday.

PIGS ETFs such as the iShares MSCI Italy Capped ETF(EWI) have rewarded investors’ faith. EWI, the lone Italy ETF, has surged 12.6% since the start of the year and ranks as one of the year’s top-performing country-specific ETF tracking a developed market.  Italy, the Eurozone’s third-largest economy behind Germany and France, remains politically volatile compared to other developed nations and that political volatility has lent itself to economic challenges. Still, EWI has pulled in $293.5 million of its $1.2 billion in assets this year. [Italy ETF Looks Bella]

EWI and the iShares MSCI Spain Capped ETF (EWP) combine for the bulk of the PIGS ETFs assets under management. The $1.5 billion EWP is up 6.5% year-to-date compared to a 2.7% gain for VGK.

The Global X FTSE Greece 20 ETF (GREK) has not been hampered by its status as an emerging markets ETF, gaining 7.5% year-to-date. It was just about a year ago that Russell Investments became the first index provider to demote Greece to emerging markets status (MSCI and S&P Dow Jones Indices would later follow), but GREK is up 64% in the past year. Greek stocks soared in January, their best start to a year since 1994. [Profits With the Greece ETF]

Do not forget the Global X FTSE Portugal 20 ETF (PGAL) . The newest member of the PIGS ETF group debuted in November 2013 and now has $20.4 million in AUM. Amid declining bond yields and the country’s efforts to exit a 78 billion euro IMF-EU aid program, PGAL is up 13.3% year-to-date. [Portugal ETF Rallies as Bailout Exit Nears]

And if we want to make PIGS PIIGS to include Ireland, it should be noted that iShares MSCI Ireland Capped ETF (EIRL) is up more than 10% this year and has pulled in $34.6 million of its $168.7 million in assets.

iShares MSCI Italy Capped ETF