Posted on 07 July 2012.
Speculative traders and investors may want to consider taking a chance with the only Exchange Traded Fund (ETF) traded in the United States that focuses exclusively on Greece, known as the Global X FTSE Greece 20 ETF (NYSE: GREK). With the Greek sovereign debt situation uncertain and the possibility that Greece could pull out of the Euro currency, buying a Greece ETF is a highly speculative trade or investment to make, and should be done with a limited amount of capital and extreme caution. An outright debt default by Greece or return to the Drachma currency could cause a Greece ETF to plunge in value, so proper trading and investing precautions should be taken.
What makes a Greece ETF enticing to speculative traders and investors is the possibility that European leaders may figure out a way to prevent a Greek debt default and to keep the country in the Euro currency, which would likely cause a steep appreciation in the value of Greek stocks and a Greek ETF. Buying a Greek ETF such as GREK is certainly highly speculative and carries a great deal of risk, but the rewards could also be great if Greece recovers from its current debt quagmire.
The Greece ETF GREK is a 100% stock equity Greece ETF that invests in a broad cross section of companies based in Greece that do the majority of their business in Greece. GREK either directly buys stocks of Greek companies or buys Global Depositary Receipts (GDRs) or American Depositary Receipt (ADRs) that represent holdings of stocks that trade in Greece. The Greece ETF GREK is designed to provide investment results that correspond generally to the price and yield performance of the FTSE/Athex 20 Capped Index, before fees and expenses.
While more speculative than most investment and trading opportunities, a Greek ETF that is down sharply because the stocks within the country that it tracks are down sharply due to macro economic issues is exactly the type of speculative trade that some traders and investors like to make. Contrarian traders and investors may see a silver lining in the current Greek tragedy and an opportunity to quickly double their money via a Greek ETF, if Greece can figure out a way to get their fiscal house in order and stay in the Euro currency. Some speculative some traders and investors would rather buy a Greek ETF such as GREK while everyone else is avoiding it, implementing the buy when nobody else wants it philosophy of trading and investing.
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