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New Zealand ETF Higher After Election

Matthew McCall

Over the weekend, New Zealand Prime Minister John Key celebrated an election victory and the country’s stock market rallied 1.3 percent to kick off the week. The gain was even more impressive when compared to the worldwide sell-off in equities Monday.

The National Party won 48 percent of the vote and therefore Key will return for a third term as the Prime Minister. The biggest winners in the election were the energy companies, as the competing Labour Party was pushing for an intervention in the energy market that could have directly affect profits in the sector.

For U.S. investors, there is an ETF that concentrates solely on stocks based in the country.

The Shares MSCI New Zealand Capped ETF (NYSE: ENZL) provides exposure to a broad range of companies in New Zealand. The ETF is spread across 11 sectors, with the largest exposure to the material stocks at 14.9 percent, followed by utilities at 14.5 percent. The largest individual holdings include Fletcher Building Limited with a 13.3 percent holding, Telecom Corp of New Zealand LTD at 12.2 percent and Auckland International Airport LTD making up 7.6 percent of the ETF.

The ETF is only up 3.7 percent over the last 12 months and has struggled as of late, down 5.3 percent over the last six months. The longer-term chart shows a solid uptrend since it began the most recent bull market in 2012. The pullback to the $39 area in the last few months has the ETF sitting on long-term support and could be an area that attracts buyers after the big election win for the ruling party.

The ETF has a 30-day SEC yield of 3.5 percent and an expense ratio of 0.47 percent.

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