Yahoo Finance Why are Poland ETFs Rising?
Two ETFs tracking Poland – iShares MSCI Poland Capped ETF EPOL and VanEck Vectors Poland ETF PLND – jumped 7.8% each in the last five days as of December 8, 2016. Poland ETFs outperformed the broader European funds - iShares MSCI Eurozone ETF EZU and Vanguard FTSE Europe ETF VGK, which were up only 4.5% and 3.6%, respectively during the aforementioned period (read: What Does Italy Referendum Mean for These ETFs?).
Poland ETFs outperformed primarily attributable to an upgrade of the country’s outlook by Standard & Poor’s (S&P), contrary to expectations. The rating agency kept Poland's rating unchanged at BBB+ but raised the country's outlook to stable from negative. As per Reuters, some investors were expecting a downgrade from the current rating. S&P stated that the upgrade was primarily because it no longer worried that the government would try to exert its influence and undermine the independence of its central bank.
Earlier this year, S&P lowered Poland's rating to BBB+ from A- and changed its outlook to negative due to a rise in government spending and a cut in the retirement age. The move led to a hue and cry with the Polish finance ministry calling the decision “incomprehensible”.
Investors who believe that Poland is poised for further upside could catch the Poland-focused ETFs (see all European Equity ETFs here).
EPOL in Focus
EPOL has about $175.9 million in AUM and an average daily volume of 326,000 shares. The product tracks the MSCI Poland IMI 25/50 index, charging 62 basis points a year from investors. With 38 stocks in its basket, this fund puts as much as 45% of its total assets in the top five holdings, suggesting high concentration risk. Financials actually makes up roughly half of the portfolio with 43.6% exposure. Energy and materials round off the top three sectors with exposure of 18.3% and 12.3%, respectively. The fund currently has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook. (read: How to Trade Strengthening Euro Zone Economy via ETFs).
PLND in Focus
The fund looks to track the MVIS Poland Index and has 26 securities in its basket, charging investors 60 basis points a year in fees. The fund has 36.8% of its total assets in the top five holdings. PLND is largely weighed toward financials, with as much as 38.9% exposure, followed by 16% allocation to energy, 12.4% coverage in consumer discretionary and 8.8% in materials. PLND sees a paltry volume of around 4,000 daily and has AUM of $13.5 million. The fund currently has a Zacks ETF Rank #4 with a Medium risk outlook.
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ISHARS-EMU IDX (EZU): ETF Research Reports
VANECK-POLAND (PLND): ETF Research Reports
ISHARS-MS POLND (EPOL): ETF Research Reports
VANGD-FTSE EUR (VGK): ETF Research Reports
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