European ETFs Flying Under the Radar (EDEN, EIRL, EWL, EWO)

The S&P 500 hit a new all-time high yesterday and the NASDAQ is trading at the best level in 13 years. Both indices are in the midst of a strong bull market that most investors are aware of. However, there are other countries around the world also doing well that are often overlooked by investors.

The iShares MSCI Denmark Capped ETF EDEN has been on a tear lately as it is in the midst of a nine-session winning streak. The ETF is up a mouth-dropping 13 percent this year and is trading at its highest price ever. EDEN is a basket of 38 stocks with the largest holding, Novo Nordisk NVO, making up 24 percent of the portfolio. The 30 percent gain in NVO in 2014 has been the catalyst for the ETF’s strong performance. The ETF also has a large presence in the industrials and financials.

Another small European country having a good year is Austria. TheiShares MSCI Austria Index ETF EWO is up 6 percent this year and is breaking out to its best level since 2011. The ETF has yet to recover its losses during the financial crisis and must more than double to get back to the 2007 high. The 41 percent in the financial stocks is the reason EWO took such a big hit in 2008 and why it has not yet been able to rally back to the old highs. The largest holding, Erste Group Bank EBKDY, is also hitting a new multi-year high and with 14 percent in the stock it has been a driver of higher prices for EWO.

Ireland was known as one of the PIIGS during the financial crisis, but they were also one of the countries to recover the quickest. The iShares MSCI Ireland Capped ETF EIRL is up 11.5 percent in 2014 and is trading at its highest price on record. An allocation of 23 percent in the top holding, CRH Plc CRH, has been boosting the ETF to new highs. The building material company is up 16 percent this year and trading at the best level since 2010. The ETF is heavily invested in the materials, consumer staples, and industrial sectors.

The iShares MSCI Switzerland Index ETF EWL is only up 2 percent in 2014, but it is trading at a new all-time high. The health care, financials, and consumer staples sectors make up over 70 percent of the portfolio of the ETF. The three top holdings are large-cap names that most investors are aware of and they make up 45 percent of the allocation. They are Nestle SA NSRGY,Roche RHHBY, andNovartis NVS.

While it is risky to invest in a single country ETF versus an ETF that encompasses a variety of countries, investors do have options. A strategy that includes building a portfolio of several international country ETFs is a way for investors to choose which parts of the world their portfolio has exposure to at any given time. This is one of the many benefits of using ETFs.