The outlook for equities in Spain has gradually deteriorated over the past year and recent developments have continued the trend.
The MSCI Spain Index Fund (EWP) is down over 45% over the past year while the S&P 500 has been flat over the same time period.
A housing bubble followed by a housing bust lead to slow growth, high unemployment and large government deficits in Spain.
More recently, concerns over whether Spain has the capacity to recapitalize its troubled banks has caused investors to flee Spanish government debt, driving up yields and putting further pressure on Spanish equities.
Top holdings for EWP include Banco Santander, Telefonica, Banco Bilbao Vizcaya Argenta, as well as clean energy provider Iberdrola and fashion conglomerate Inditex. The fund is fairly concentrated with 50% of assets in the top three holdings. The expense ratio for the $130.0 billion ETF is 0.52%.
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– ETF MarketPro Staff
June 4, 2012