Trackinsight: Greek ETFs rise on looming rate hikes

The Athex Composite Share Price index, Greece's market benchmark index, reached a 7-year high on Wednesday. Here's how you can gain exposure through Exchange-traded funds.

The Athex Composite Share Price index, Greece's market benchmark index, reached a 7-year high on Wednesday. The index tracks the performance of the shares of the companies that trade in the Big Cap segment of the Athens Exchange. The index is on track to register its third straight monthly gains after gaining +4.86% and +2.95% in January 2022 and December 2021 respectively. Leading this year's charge are Alpha Bank SA (Banking, +32.68%), National Bank of Greece (Banking, +29.43%), Eurobank Ergasias (Banking, +27.94%), OPAP SA (Betting, +9.82%), and Hellenic Telecommunications (Telecommunications, +8.4%). Bank stocks have risen on signs that the European Central Bank could raise interest rates this year in response to the global wave of inflation. 

The Bank of Greece project GDP growth to be 5.0% in 2022, and 3.9% in 2023, subject to continued strong support from international tourism, euro area recovery, and an acceleration of investment. This could potentially represent an opportunity for investors looking for investments to park their funds.

Investing in America-domiciled Greece Equities ETFs

Foreign investors bullish on Greece stocks could gain exposure via Global X MSCI Greece ETF (GREK). The fund ($141 million AUM) tracks the MSCI All Greece 25/50 Index and invests in among the largest and most liquid companies in Greece. In terms of sector exposure, Financials have the highest allocation (31.8%), followed by Consumer Discretionary (17.3%), Communication Services (14.9%), Utilities (11.5%) and Industrials (9.1%). Among GREK's top holdings, are Hellenic Telecom (15.09%), Alpha GA (11.62%), Eurobank Ergasias (10.73%), OPAP SA (7.65%), and National Bank of Greece (5.51%). The fund has a total expense ratio of 0.58% and trades primarily on the NYSE Arca. Year-to-date, the fund has generated +12.4% in returns.

Investing in Europe-domiciled Greece Equities ETFs

European ETF investors have several options to gain exposure to Greek Equities. That includes Lyxor MSCI Greece UCITS ETF (GRE), ALPHA ETF FTSE Athex Large Cap Equity UCITS (AETF), and Expat Greece ASE UCITS ETF (GRX). The GRE is the largest among the three with €123 million in assets under management. The fund aims to track the MSCI Greece IMI + Coca-Cola 20-35 Net Total Return and provides a synthetic exposure to the large, mid, and small cap segments of the Greek market, covering about 99% of the Greek equity universe. The sector breakdown of the index shows that Financials (29.04%) have the highest allocation, followed by Consumer Staples (19.62%), Consumer Discretionary (13.97%), Communication Services (13.01%) and Utilities (9.68%). The top leading names of the index are Coca-Cola HBC (18.67%), Hellenic Telecommunications (13.01%), Alpha Bank (10.07%), Eurobank Ergasias (9.31%) and OPAP SA (9.17%).

The fund has a total expense ratio of 0.45% and trades on the Deutsche Börse (LYXGRE, EUR), Euronext (GRE, EUR), and Borsa Italiana (GRC, EUR). Year-to-date, the fund has generated a total return of +8.59% (as of Feb.15, 2022).

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