European ETFs Kicking Sand in Yanks' Eyes

by: Carl T. Delfeld posted on: July 16, 2007 | about stocks: EWD / EWG / EWK / EWQ

Font Size:
Print
Email

Many American exchange-traded fund investors have missed and been baffled by European markets kicking up dust in Yank eyes. The recipe is clear: strong currencies, better politics and top class multinationals not tied to domestic markets.

The most potent ingredient is a new wave of political reform. Starting in Germany (EWG), the election of center right leaders in Sweden (EWD), Belgium (EWK) and recently in France (EWQ) give hopes for a Reagan like revolution that drive big bull markets like the one ignited by the Reagan revolution.

The Economist highlights these changes and points out that since the end of 2006 euro area GDP has outpaced America's. This year, it should grow by 2.7%, ahead of both America and Japan. The euro is at new highs against the dollar and the yen. Unemployment has fallen to 7%, the lowest since the euro started life in 1999.

The change of attitude has been most obvious in Germany and the ETF that tracks its market (EWG), representing the biggest European economy. From 1995 to 2005 German GDP grew at an average of only 1.4% a year. But in the first quarter of 2007 it expanded more than twice as fast. But even these numbers miss the performance of European multinationals which are underrated by most American investors.

Be the first to comment on this article! See below...