Going Greek: Unique ETFs For Accessing Greek Stocks
Black Monday was very black indeed for Greek stocks as the Athens Stock Exchange tumbled 10.5 percent. If Greece was still a developed market, which it is not, that would have been good for the worst decline among developed market equity bourses.
As it was, the 10.5 percent slide experienced by Greek stocks was more than double that of their Spanish counterparts. Stocks in fellow PIIGS countries Italy and Portugal lost less than 6 percent. Athens shocks were enough to send the Global X FTSE Greece 20 ETF (NYSE:GREK) lower by 6.8 percent in New York on Monday, helping the lone dedicated Greece ETF to join 289 others in the new all-time low club for ETFs.
With another change in power and elections slated for perhaps as early as September 20, GREK and Greek equities will be captivating global investors' attention over the next few weeks. Investors that do not want the commitment of GREK but are still looking to participate in some potential upside for Greek equities have options courtesy of some undiscovered ETFs.
The Other Guy
Outside of GREK, one of the ETFs with the largest exposure to Greek stocks is the Cambria Global Value ETF (NYSE:GVAL). GVAL offers exposure to 11 countries ranging in weights from 6 percent to 10 percent, so the fund's 9 percent allocation is significant.
Related Link: Can Europe Recover After Monday's Slide?
The aim of the actively managed GVAL is to unearth the least expensive stocks in countries where macro factors, such as political volatility and recessions, have created deeply compelling valuations. Indeed, the ETF's country lineup is true to that objective. For example, Russia, historically home to some of the least expensive emerging markets stocks, is 10 percent of GVAL's weight.
Over the past month, GVAL is down 5.9 percent, which does not sound good, but that showing is stellar compared to the average loss of 11.4 percent turned in by the MSCI EAFE and MSCI Emerging Markets indexes over that period.
The New Guy
The newly minted Deutsche X-trackers MSCI Southern Europe Hedged Equity ETF (NYSE: DBSE) is a credible option for the conservative that wants indirect exposure to Greek equities. Indirect because although DBSE, which debuted last week, is as close to a PIIGS ETF as there is on the market today, the new fund allocates over 95 percent of its combined weight to Spanish and Italian stocks.
Spanish and Italian bond and equity markets frequently react in unison to what is happening in Greece, but DBSE is likely to help investors skirt Greek equity market volatility. GREK has a beta of 2.01 to the MSCI Emerging Markets Index and the Greece ETF's standard deviation of 48.2 percent is nearly quadruple that of the emerging markets benchmark, according to Global X data.
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