ETF Talk: Investing in Germany, Europe’s Economic Engine

It was only in recent weeks that Europe pulled out of its longest recession since World War II (1-1/2 years) due largely to the turnaround in the French and German economies. In particular, the German economy drove the euro higher amid increased German investor confidence. And Germany ended its second quarter with a stronger-than-expected growth rate of 0.7%. Investors who are interested in profiting from the rise may want to consider the iShares MSCI Germany Small-Cap (EWGS).

This non-diversified fund tracks investment results from the MSCI Germany Small Cap Index, and it invests at least 90% of its assets in the underlying index’s securities.

The impressive 17.5% growth that EWGS has had this year reflects Germany’s resurgence. Last year, EWGS also had a strong gain in climbing 14.7%. In addition, the fund features a 1.94% dividend yield. Germany’s economic growth is projected to continue — but at a modest annual pace of 0.5% this year — boosting Chancellor Angela Merkel’s chances of reelection, as she likely will gain credit from voters for the improving economy.

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