Extraordinary value in Greek ETF?

|By:, SA News Editor

Up more than 20% YTD, the Global X FTSE Greece ETF (GREK -0.6%) remains maybe the cheapest ETF in the world, writes Paul Baiocchi, with a trailing P/E ratio of just 1x. To put this in perspective, the next cheapest single-country ETF is one for Russia at 5.6x earnings, still 5x more expensive (based on earnings) than Greece.

Typically something is only this cheap ahead of an anticipated bankruptcy or massive earnings miss, but how much of Greece's troubles are in the rear-view mirror at this point? The only global value fund - the iShares' MSCI EAFE Value ETF (EFV) - gives Greece just an 8% weighting, but Greece has recently been reclassified as an emerging market. Might the country's shares soon show up in the MSCI Emerging Markets Value ETF (EVAL)?

"If you’re a traditional value investor, [the 20% move] could prove to be just the beginning," says Biaiocchi.