The State of European ETFs

click to enlarge

Look at the above picture - it is a 12 month performance map for European Exchange Traded funds, and it's no surprise that it is a deep red color.

The worst performers are Belgium iShares (EWK) with almost 70% down, followed by Austria iShares (EWO) with -66%. Austria, known as the "gate to Central and Eastern Europe," has been under selling pressure, especially in the last weeks when big hits came to the markets of Hungary, the Czech Republic and Poland.

A relative winner seems to be iShares Switzerland (EWL), which is down 37%. The Swiss ETF benefitted mainly from positive trends of the Swiss franc vs. the Euro. But generally we can conclude that the European Union ETFs are down more than 50%.

For comparison, U.S. funds show a far better performance: S&P (SPY) -41%, iShares Dow Jones (IYY) -40% and PowerShares QQQ (QQQQ) -44%.

Comments

[Rob25:]

It appears that there are opportunities to Arbitrage the European markets with spread trades between some of the individual country ETFs. For instance selling the Italy ETF (EWI) and buying the Swiss ETF (EWL).

Since August, Italian stocks have sold off on heavy volume. Generally trade volumes on global exchanges have been at record levels over the past few months. However, trading levels on the Milan Stock Exchange are over 300% higher then the previous three month period between May and July. The Swiss sell off volume, by comparison, is up only 10% over the same period.

www.mobindex.com/quote...

2008 Oct 26 10:16 PM