Investors seeking momentum may have Horizons DAX Germany ETF (DAX - Free Report) on radar now. The fund recently hit a new 52-week high. Shares of DAX are up approximately 28.2% from the 52-week low of $25.6/share.
But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.
DAX in Focus
DAX focuses on providing exposure to the German equity markets. It charges 45 basis points in fee per year. Consumer Cyclical, Financial Services and Industrials are the top three sectors of the fund, with 19.0%, 17.0%, and 14.2% allocation, respectively (as of Jan 15, 2018). It has top holdings in Siemens AG, Allianz SE and SAP SE with 9.1%, 8.7%, and 8.2% allocation, respectively (as of Jan 15, 2018) (see all European Equity ETFs here).
Why the Move?
The move can primarily be attributed to the increasing optimism of investors around the formation of a stable German government. Angela Merkel’s plans of forming a coalition with the Greens and pro-business Free Democrats (FDP) failed. Now the four-time chancellor is eyeing a coalition with the Social Democrats (SPD). Merkel and SPD’s Martin Schulz reached a deal to start coalition talks, bringing the nation out of months of political uncertainty.
More Gains Ahead?
Currently, DAX has a Zacks ETF Rank #1 (Strong Buy) with a Medium Risk outlook. Moreover, it has an impressive weighted alpha of 26.80. So, there is definitely some promise for those who want to ride this surging ETF a little further.
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