As Americans -- and especially those of Italian heritage -- celebrate Columbus Day on Oct. 8, some might care to see if Christopher passed up some profitable investments in his country of birth when he set off to find a shortcut to Asia.The purest diversified U.S. play in the Italian stock market, the iShares MSCI Italy ( EWI) exchange traded fund, has outperformed the total-return S&P 500 by some impressive margins in recent years. Its largest holdings include ENI SPA, Unicredito Italiano SPA, Intesa Sanpaolo SPA, Telecom Italia SPA (TIT) and Assicurazioni Generali. (None are traded in the U.S.) The iShares Italy ETF's performance has been generally uninspired to this point in 2007, up 4.9% through the end of September vs. 9.13% for the S&P 500 total-return index and 10.89% for the MSCI EAFE index of international stocks. But it more than doubled the S&P's return in 2006, more than tripled the domestic gauge in 2004. The fund rewarded its holders with a gain of 39.18% in calendar 2003, more than 10 percentage points better than the S&P's 28.69% gain for that year. Its decline of 7.00% in calendar 2002 was considerably less damaging than the S&P's 22.10% setback. In each of those years, it bettered the international MSCI EAFE index. The one calendar year in the past five that it lagged the U.S. and international benchmarks was 2005 when the iShares Italy ETF edged 1.88% higher, well behind the S&P's 4.89% gain and the MCSI EAFE's respectable 14.02% return.
| Pure Play |
The iShares MSCI Italy has outperformed the S&P 500 by impressive margins in recent years
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