Dividend Safety Check: EWO and Austrian Equity Income
The iShares MSCI Austria ETF (NYSEARCA:EWO) is the cleanest single-country vehicle US investors have for Vienna-listed equities, and after a 41% one-year run the conversation has shifted from price to payout.
EWO: The Bullish Case For Austrian Equities
The iShares MSCI Austria ETF (EWO) offers concentrated exposure to Austrian equities, with nearly 50% in financials and significant allocations to energy and industrials. EWO has outperformed median ETFs across timeframes. Energy and industrial holdings benefit from infrastructure expansion and manufacturing revival, while ECB policy and sectoral catalysts support near-term upside.
This Standout Europe Foreign Equities ETF May Surprise You
It's been a big year for ex-U.S. equities. Both broad international and market specific funds have delivered for ETF investors amid tariff concerns and a weakening U.S. dollar.
EWO: Valuations Still Look Cheap, But Probably Prudent To Book Profits Now
Since we last covered it, EWO has delivered a 35% return in 7 months and outperformed Eurozone and Global stocks by 1.46x and 1.30x, respectively. Despite Austria's improving GDP, growth is still expected to lag Europe in a big way, while consumption momentum is slowing and inflation risks are rising. CRE sector pressures are weighing on Austrian banks profitability this year, but EWO's top stock - Erste Group Bank AG is faring much better.
EWO: Financials And Cyclicals Explain The Poor Long-Term Performance
US stock valuations are extreme, so I'm seeking undervalued opportunities in overlooked markets like Austria. The iShares MSCI Austria ETF (EWO) offers exposure to Austrian stocks, with a 0.50% expense ratio, a 5.13% dividend yield, and only 19 holdings. Many of the holdings are cyclical, including banks, insurance companies, energy firms and construction-related companies.
EWO- Cheap Valuations And Better Growth Prospects Ahead
The iShares MSCI Austria ETF (EWO) has outperformed global and Eurozone stocks this year with a 16% YTD. We expect EWO to continue to fare well, as GDP growth prospects are now on the up after a long period of contraction, buoyed largely by better consumption trends. EWO offers compelling valuations with a P/E at a 37% discount to European stocks and a 50% discount to global stocks, alongside a 7% yield.
