| |
|
|
| |
Sweden ETFs
|
|
 |
| |
About Sweden ETFs |
|
Sweden ETFs Overview and forecast
The sole Swedish ETF proves the point that all the European ETFs have their own personalities and individual styles. iShares MSCI Sweden Index Fund (AMEX:EWD) has a historical chart that looks like some of the rougher parts of the Alps. For this ETF, the 2008 crash was less of a problem than the local hits its market took in 2003.
This is the classic stock index ETF mix, and EWD has shown a lot of character in its frenetic trading in the 2006- 2009 period. The Swedish market doesn't seem to mind putting in large amounts of capital, and this particular ETF was carrying volumes of millions in its peak trading period, at top range prices.
The 2008 crash was a vertical dive, with a series of jagged ups and downs showing very good margins for traders in the period September 2008 to March 2009, unlike most other markets. EWD rebounded quite strongly several times, on very much lower volumes of trade. A sellers' market, and that trend, with some stumbles over a spike or two, has continued. In the second quarter of 2009, EWD returned with a vengeance, posting a second quarter result of nearly 30%, but from the lows in March, more like 50%, from below $12 to $18.
Short term (6 months)
The net impression of that quarter is that there's a potentially good trading market in Sweden. Volumes returned to life, too, in June, and relatively quick $2 margins on prices are also showing up. The Swedish market has shown the ability to support a lot of much higher priced, higher volume trade, so these are definitely signs of improving levels of trading intensity.
The upside is pretty obvious, and if the Rate Of Change (ROC) is looking a bit like a series of waves, the tide appears to be rising pretty consistently. The Swedish ETF has shown the ability to rise steadily and stay in higher price ranges for sustained periods. The big spikes and peaks are anomalous, but the money is there to back up higher prices.
Medium term (2 years)
Historically, the Swedish market has definite phases in its rises and falls, and the two year period seems to be the usual duration of these moves. It's looking like 2008 was an environmental change for Sweden, like the rest of the world, and the new investment models are becoming trader- based. In Sweden's case, that might be a very healthy development.
The strong rebounds indicate some basic truths of the market. Investors are keen on getting back into the markets, but they're also fussy. Trading indicates that a much less long term, more focused trading pattern is driving some of the upward moves, and this is a well capitalized market. The medium term in Sweden, like the rest of Europe is likely to see an adaption to this new investment model, and ETFs are the obviously marketable approach. EWD has had a big market all to itself. The emergence of the DAX based ETFs in other parts of Europe is looking likely to increase the levels of capital moving in to these markets, and Sweden would be an obvious choice of a new market for both the DAX and other major fund operators. Increased levels of investment could drive the Swedish market upwards very effectively in the medium term.
Long term (5 years)
The long term is much less obvious. The medium term moves are quite clear, and although historical performance is no guarantee of anything, the longer term moves of EWD have been to lows, from 1998- 2003 and 2003- 2008. These phases represent distinct, and very different, investment environments, as wells as local conditions, so they may not relate to any real natural cycle in this market.
The general impression is that non- boom cycles are healthier for the Swedish investment market. The rate of price moves is reasonably good, and consistent, when the global markets aren't in a frenzy. Index based ETFs like EWD, holding major stocks balanced to gear their returns to local heavyweights, are generally inclined to follow indices pretty reliably with some upside built in. There's no reason to believe another massive boom and bust cycle will result soon from the 2008 global debacle, so the long term, hopefully, will be in the non- boom mode, with a reliable upside.
Qualifiers to projections
It's been quite unavoidable to raise the issue of lack of other ETFs in Sweden's case. There's a real anomaly in that a strong, otherwise very modern, local investment market hasn't been a bit quicker off the mark in taking up the ETF model. EWD is a proven success, and has been making money for local investors for quite a while, in most market environments. It's a bit like the NYSE not taking up the idea of options; it doesn't make much sense for them to be leaving a perfectly good investment option out of their markets. Sweden has a strong market economy, with the capital to turn itself into a very attractive market for fund operators. Sweden could also benefit from commodities investment ETFs, among the long list of obvious applications of ETF models to this market.
The local factor is the debatable point about an otherwise natural process of capital development. Sweden rightly represents itself as a distinct entity compared to the rest of Europe. There may be reservations about opening up new investment positions which aren't obvious to outsiders. It'll be interesting to see how this market evolves, in the face of the global moves into new investment models.
|
|
|
| |
|
|
|
|
Last Updated on: 2010-01-14 02:03:40 |
| |
|
|
| |
|
Quotes are updated automatically. Quotes are delayed. Etftips.com has not
reviewed, and in no way endorses the validity the data. Etftips.com shall not be
liable for any actions taken in thereon. All information provided "as is" for
informational purposes only, not intended for trading purposes or advice.
Neither Etftips.com nor any of independent providers is liable for any
informational errors, incompleteness, or delays, or for any action taken in
reliance on information contained herein. By accessing the Etftips.com site, you
agree not to redistribute the information found herein. ETF Values can go up as
well as down.
|
| |
| Copyright EtfTips.com ©2009 |
|
|
| |
|
|
