Planning a trip to Europe anytime soon? My suggestion is go change your money. I have made that same comment for about two years now and I am not sure if anyone actually followed up on that sound advice. While the dollar has been sinking the Euro has been rising much to the chagrin of tourists and Eurozone companies. Just as an economic recovery made its way to Europe many Eurozone companies profits and sales are being hit.
The other guys
Richard Milne from the Financial Times penned a very interesting article about the difference in corporate performance of Eurozone and non-Eurozone companies. Milne provides the following interesting facts about corporate performance from both Eurozone and non-Eurozone companies:
- Eurozone companies (excluding oil and financials) have seen a drop of 12.5% in sales and a 27% drop in profits for the third quarter.
- Companies outside the Eurozone such as the UK, Switzerland and Sweden have seen a 2.6% drop in sales and 1.2% drop in profits.
The Euro’s success versus the dollar is putting vast amounts of pressure on Eurozone companies as they compete with American companies.
ETF Plays
How can you position yourself to profit from the falling dollar in your European investments. If you believe the dollar will continue to decline against the Euro these are the ETFs to play. The iShares Sweden Index (ticker EWD), iShares Switzerland Index (ticker EWL) and the iShares United Kingdom Index (ticker EWU).
iShares Sweden Index EWD is up 67.85% ytd and is well above its 50 and 200 day EMA.
The iShares Switzerland Index EWL is up 39.86% ytd and is above its 50 and 200 day EMA.
The iShares United Kingdom Index is up 49.69% ytd and is well above its 50 and 200 day EMA.
Charts courtesy of StockCharts.com
Disclosure Statement: ETFGPS is a blog that Navigates The World of ETFs. Sustainable Investment Strategies LLC is a Registered Investment Adviser in the State of Maryland, and does not hold positions in the ETFs mentioned at the time of writing. Investors who are interested in money management services may visit the Sustainable Investment StrategiesLLC web site.