Belgium ETF Could Take Advantage of Undervalued Market

Those investors looking to gain global banking and financial exposure at low valuations should look at the Belgium ETF (EWK).

Belgium, which broke away from the Netherlands in 1830, sometimes presents investors with solid value. King Albert II reigns over this industrious nation with Dutch –speaking Flemings in the north and French-speaking Walloons in the south. Belgium sits at the crossroads of Europe and is home to both NATO and the European Union.

The Belgium ETF contains 23 companies with the insurance and banking behemoth Fortis leading the way with 23% of the basket. Financials and banks make up more than 50% the holdings of the Belgium ETF with materials, food and telecom companies adding an additional 22%.

The Chartwell ETF Advisor has noticed that the Belgium stock market is undervalued trading at 1.6 times book with a forward price earnings ratio of 10.5. It enjoys low interest rates and according to data from EmergingPortfolio.com, global money managers were increaseing their Belgium weightings.

Comments

[jaybe_be:]

Interesting historical intro, especially under the current political turmoil ! Actually, Flemish and Walloon politicians seem not able to reach an agreement on a necessary constitutional law reform.
155 days after election day (June 10th 2007) there is still no new government formed and Belgium looks like a steerless ship.
King Albert II recently composed a Council of Wise Men, to work out proposals solving this governmental crisis.
Anecdotically, a survey in the Netherlands showed that 55% of the Dutch people would not be opposed to a merger with the Flemish part of Belgium.
The French-speaking Walloons could annex to France, but what would happen to Brussels ? It is already the Center of Europe !

2007 Nov 14 04:04 PM