The 2015 international women's football world championship tournament will be kicked off this weekend in the host nation – Canada. The tournament will heat up over this month, with the champion being crowned on July 5, in BC Place, Vancouver.
Since this is a global event, the FIFA world cup would drive growth across continents, especially in industrial spaces such as media, advertising, restaurants, hotels and airlines. Thanks to this, many investors are interested in betting on the stocks of those countries that could mint money from this month-long event (read: Top ETF Performers of May).
And the proliferation of ETFs makes this possible as there is now a huge number of country ETFs, which could help us to find out the one that would emerge as the winner during the 2015 World Cup event.
Those charged up for the tournament can take a shot at ETF investing. For the love of the game, we have broken down the nations into their respective World Cup groups and highlighted the most popular ETF tracking each nation. Much like the real World Cup, two nations from each group will advance to the next round.
Fortunately, all the groups have at least two nations that have ETFs making the game easier and the rules straight. If there is a tie among ranks, we will consider the three months performance in selecting the ETF qualifying for the next round.
Winner: China (FXI - Free Report) - Zacks ETF Rank #3 (Hold)
Runner Up: The Netherlands (EWN - Free Report) – Zacks ETF Rank #4 (Sell)
Third Place: Canada (EWC - Free Report) – Zacks ETF Rank #4
Last: New Zealand (ENZL - Free Report) - Zacks ETF Rank #4
Since none of the country ETFs in this group has a Zacks Rank #1 or #2, FXI easily made to the top position. However, there is a tie for the other spots among the three ETFs having a Rank #4. The Netherlands edge out Canada and New Zealand in terms of the trailing three-month performance, gaining nearly 5% compared to a gain of 0.5% for EWC and a loss of 6% for ENZL.
Winner: Norway (NORW - Free Report) - Zacks ETF Rank #3
Runner Up: Germany (EWG - Free Report) – Zacks ETF Rank #3
Third Place: Thailand (THD - Free Report) – Zacks ETF Rank #3
Ivory Cost: No ETF tracking this nation
While there are only three representatives – all Zacks Ranked #3 – in this group, there is a tie. Thus, looking at the three-month performances, Norway beat Germany and Thailand by wide margins.
Winner: Japan (EWJ - Free Report) - Zacks ETF Rank #2 (Buy)
Runner Up: Switzerland (EWL - Free Report) – Zacks ETF Rank #3
Cameroon: No ETF currently tracking this nation
Ecuador: No ETF currently tracking this nation
This was an easy group with EWJ and EWL as the only representatives. Switzerland has a Zacks Rank #3, trailing the Buy-rated Japan (read: 4 Strong Reasons to Buy Japan ETFs Now).
Winner: Sweden (EWD - Free Report) - Zacks ETF Rank #3
Runner Up: U.S. (SPY - Free Report) – Zacks ETF Rank #3
Third Place: Australia (EWA - Free Report) – Zacks ETF Rank #4
Last: Nigeria (NGE) - Zacks ETF Rank #5 (Strong Sell)
U.S. and Sweden advance in this group, leaving Australia and Nigeria with Ranks #4 and #5, respectively, to bite the dust. Post ‘shoot out’ between the two, EWD gets the top spot as that fund outperformed SPY in the trailing three months by a pretty wide margin.
Winner: South Korea (EWY) - Zacks ETF Rank #2
Runner Up: Spain (EWP) - Zacks ETF Rank #3
Third Place: Brazil (EWZ) - Zacks ETF Rank #4
Costa Rica: No ETF currently tracking this nation
This was another easy group for ETFs as the countries easily advanced according to their Zacks Ranks.
Winner: France (EWQ) - Zacks ETF Rank #3
Runner Up: England (EWU) - Zacks ETF Rank #3
Third Place: Mexico (EWW) - Zacks ETF Rank #3
Last: Colombia (GXG) - Zacks ETF Rank #4
In this group, we have used British ETF (EWU) as a proxy for England. While there the three Rank #3 ETFs end up in a tie, EWQ beat EWU and EWW by wide margins.
Ranking of Third-Placed Teams
Here, the four best teams are selected among those ranked third in every group for the next round. We have used a similar strategy as the one above to decide on the four winners.
A: Mexico (EWW) - Zacks ETF Rank #3
B: Thailand (THD - Free Report) – Zacks ETF Rank #3
C: Canada (EWC - Free Report) – Zacks ETF Rank #4
D: Brazil (EWZ) - Zacks ETF Rank #4
While Thailand and Mexico advanced to the top two positions, EWW beat THD in terms of its three-month performance. Out of the remaining three with a Zacks Rank #4 each, Canada outstripped Brazil generating returns of 0.5% versus a loss of 2.8% for EWZ while Australia left behind (read: Are Mexico ETFs Ready for a Rebound?).
Round of 16
For the 16 remaining country ETFs, we have slotted them much within the World Cup bracket. In fact, the winners and runners-up of each group as well as the ETFs in the third spot will face match-ups replicating the real World Cup tournament schedule. We use the same process that we did in the first rounds, focusing on the Zacks ETF Ranks and the trailing three-month performances to determine the winners:
Netherlands vs. Switzerland: Switzerland ETF outranks its Netherland counterpart, so EWL advances to the next round.
Sweden vs. Thailand: Both of these ETFs currently have a Zacks Rank #3 so we look at the performance to break the tie. Sweden is the topper and advances by virtue of its 0.6% gain in the past three months versus loss for Thailand ETF.
Norway vs. Brazil: Norway easily beats Brazil thanks to a favorable rank of NORW compared to a poor rank for EWZ.
France vs. Spain: Both of these European country ETFs have a Zacks Rank of #3, so a look at their performance would help to find the tiebreaker. France easily beats Spain since it posted a 3.8% gain in the trailing three-month time frame versus 1.9% for the latter. France will now play with Norway in the quarterfinals.
South Korea vs. U.S.: South Korea, thanks to its strong ETF rank, is able to easily get past America and move on to the quarterfinals.
Japan vs. Mexico: Japan continues to make a dream run to the quarterfinals thanks to the strong rank of EWJ relative to EWW.
Germany vs. England: Both of these country ETFs have a Zacks Rank #3, so we have to again take resort to their performance for a tiebreaker. England is able to beat Germany thanks to a 0.9% gain in the trailing three months.
China vs. Canada: Here too, China easily edges past Canada with its strong rank of #3.
Among the eight winning ETF teams, the six-month performance was used to decide the winners of remaining matchups that should take the tournament to the semifinals. The winner of one group will play with the winner of the group following numerically. For example, Switzerland will play with Sweden; Norway will face France and so on (read: Is Europe ETFs Rally Over?).
Switzerland vs. Sweden: Switzerland is the winner as EWL gained 6.8% over the past six months compared to the 4.8% gain for EWD.
Norway vs. France: Here, EWQ easily beats NORW with gains of 5.2% versus loss of 5.5 for the latter.
South Korea vs. Japan: Though both funds have been trending upward over the past six months, South Korea ETF pulled back in recent months. As such, Japan advances to the semifinals with a gain of 11.7% over the past six months.
England vs. China: Here, FXI is the undoubted winner, edging out EWU by a wide 18.5% margin.
For the final four, we look at the trailing one-year performance to see which has the maximum momentum heading into the Women’s World Cup of ETFs. In the matchups, we have Switzerland and Norway on one side, and Japan versus China on the other.
iShares MSCI Switzerland Capped ETF (EWL - Free Report) vs. Global X MSCI Norway ETF (NORW - Free Report)
For this ETF faceoff, Switzerland is represented by EWL and NORW is Norwegian player. Below, we have taken a loser look to these funds before deciding on the winner:
EWL: The Swiss ETF is often overlooked in favor of its bigger regional rivals, but this fund is still relatively popular with over $1.2 billion in assets and average daily volume of 619,000 shares. The fund holds 38 securities in its basket with heavy concentration on the top three firms – Nestle, Novartis and Roche – that collectively account for 44.6% of total assets. From a sector look, health care dominates the fund at 31.9% while financials, consumer staples and industrials round off the next three. The fund charges 48 bps in fees per year from investors and added 2.9% over the trailing one-year period.
NORW: This fund holds 53 stocks in its basket and is heavy on the top three firms – Statoil, DNB Norway and Telenor – with at least 12% share each. Energy takes the top spot in terms of sectors with 32% share, closely followed by financials, telecommunications, consumer staples, and basic materials. The ETF has amassed $97.1 million in its asset base while trades in a moderate volume of roughly 143,000 shares per day on average. It charges 50 bps in annual fees and expenses and lost 24.8% in the trailing one-year period.
Winner: The Swiss ETF wins and advances to the final round to take on the winner of the Japan vs. China matchup.
iShares MSCI Japan ETF (EWJ - Free Report) vs. iShares China Large-Cap ETF (FXI - Free Report)
For this faceoff, EWJ represents Japan and China is represented by FXI. Below, we take a closer look at these funds before deciding on the winner:
EWJ: This fund is the most popular and liquid ETF tracking the Japanese economy with AUM of $19.3 billion and average daily volume of 32.3 million shares. Holding 313 securities in its basket, it is slightly skewed toward the top firm – Toyota Motor – at 6.20% while other firms do not account for more than 3.06% of assets. However, the product is widely spread out across a number of sectors. Expense ratio came in at 0.48% and EWJ has been on an uphill journey in the past one year, having returned 13.6%.
FXI: This fund provides exposure to 52 Chinese large cap stocks with heavy concentration on the top five holdings, with nearly 37.3% of total assets. In terms of sector holdings, half of the portfolio is allotted to financials while oil & gas, telecom, and technology round off the next three with double-digit exposure each. The product has about $8 billion in AUM and is extremely liquid, trading in volumes of more than 18.5 million shares a day. FXI charges 74 bps in fees per year from investors and surged 36.2% over the last one year (read: 2 China ETFs Hitting All-Time Highs).
Winner: China ETF wins and will again matchup with the Swiss ETF for the championship.
Third Place Game and World Cup Championship
For the third place game and the championship, we will take a look at which ETF has been a better performer since the last Women’s World Cup which ended on July 17, 2011 in Germany. The national ETFs with superior performance will be crowned the winners in their respective matches:
Third Place Game: In the third place battle, Japan finishes ahead of NORW owing to its long-term performance strength, and captures the third place on 20% price gain since the end of the last World Cup versus a loss of about 22% for NORW.
The Championship: We have the Swiss beating China to take the championship. Switzerland ETFs is a clear winner since the end of the last Women’s World Cup, having gained 33% compared to 16.3% for the China ETF.
Based on our ranking system and recent performances, it looks like iShares MSCI Switzerland Capped ETF (EWL - Free Report) will lift this year’s trophy for Women’s World Cup in ETFs. While it was exciting and fun to make passes toward the goal that would decide the ETF winner, we expect the twists and turns in the FIFA tournament to lead to some dramatic moves in the investment world too.
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