Germany ETF May Get Luxury Car Boost

As the US economy continues to show signs of recovery and incomes in developing nations continue to rise, demand for German luxury cars is expected to increase and will likely provide positive price support to the iShares MSCI Germany Index (EWG).

According to a recent article in the Wall Street Journal, BMW AG, Daimler AG (maker of Mercedes Benz) and Volkswagen AG (parent of luxury brand Audi) are all no track to reach record sales in 2011.  In fact, in the first quarter of the year, sales of BMW rose 21 percent from a year earlier, those of Audi were up 18 % year-to-year and Mercedes-Benz witnessed a jump of 13% when compared to the same period last year. 

As for the remainder of the year, this trend is likely to continue.  In fact, some marketers, such as AutoNation, the nation’s largest auto retailer, will spend $100 million through 2012 on new and renovated showrooms for Mercedes-Benz, BMW, and Audi to entice the affluent consumer. 

As mentioned above, the iShares MSCI Germany Index (EWG) is likely to reap the benefits of increased consumer spending by the affluent consumer as that it allocates nearly 12.1 percent of its assets to BMW AG, Daimler AG and Volkswagen AG. 

Disclosure: No Positions

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About etftutor
Kevin Grewal is the founder, editor and publisher of ETF Tutor and serves as the editor at www.SmartStops.net, where he focuses on mitigating risk and implementing exit strategies to preserve equity. Additionally, he is the editor at The ETF Institute, which is the only independent organization providing financial professionals with certification, education, and training pertaining to exchange-traded funds (ETFs). Prior to this, Grewal was a quantitative analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds a bachelor's degree from the University of California along with a MBA from the California State University, Fullerton. He is contributing author on The Street - his articles can also be found published on various sites including Yahoo! Finance, The Globe and Mail , Daily Markets, MSN Money, Seeking Alpha, Fidelity Investments, Traders Library, and Minyanville. Prior to this, Mr. Grewal was an analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds

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