The European ETF To Play The Portugal Bailout Exit [GLOBALXFTSEPORTUGAL20ETF]

PGAL in Focus

The recently launched Portugal ETF has been the second best performing fund in the European equity space in the year-to-date time frame, returning 15.6%. The fund tracks the FTSE Portugal 20 Index and holds a small basket of 20 stocks.

The product is heavily concentrated in its top 5 holdings, which form more than half of the total fund assets. The fund’s top holding Energias De Portugal alone has a 20% allocation in the fund.

Sector-wise, the fund is heavily weighted towards the utilities (26.4%) and financials (21.2%) sectors. The fund charges 55 basis points as fees per year (read: Play the PIIGS Recovery with These European ETFs).

Bottom Line

Regardless of whether the Portuguese government chooses to end its bailout program with or without a precautionary credit line, it still needs to keep up its reforms to further improve its economic condition.

Though the unemployment rate is showing a declining trend, it is still in double digits. The European Commission has emphasized that Portugal’s high debt-to-GDP level can only be managed if the country continues to maintain its reform momentum and fiscal adjustments.

Portugal has nonetheless achieved a tremendous amount under the bailout program, but it still needs to address its large debt burden and a high unemployment rate before the country can return to prominence. But if you believe this can be the case, investors can consider PGAL for some quality exposure to this in-focus economy.

This article is brought to you courtesy of Eric Dutram.

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