The fund is heavily concentrated on the top firm – EDP – at under 20% of total assets, closely followed by Jeronimo Martins and Galp Energia at 13% each. From a sector perspective, utilities and consumer services dominate the fund’s portfolio at nearly 26% and 23%, respectively, indicating that the ETF might not be volatile due to higher allocations to defensive sectors (see: all the European ETFs here).
Given the bullish trends and improving confidence, the Portugal ETF could make for an interesting investment for patient investors who believe that the worst might be over for the European debt story and expect good trading ahead.
Further, PGAL has room for further upside than the larger PIIGS member such as Spain and Italy that always have better bailout prospects anyway. However, growth might be difficult in the near term as the country is still battling austerity measures, so make sure to watch this fund closely if you decide to take on this intriguing market.
This article is brought to you courtesy of Eric Dutram.