Betting on Non-Euro Europe

In recent weeks, Europe has been split into two in the eyes of many investors: the euro zone and economies that use a non-euro currency. One of the best ways to bet against the former is by shorting the iShares MSCI EMU Index Fund ( EZU), which includes stocks of EU members that have adopted the euro as their currency. One of the best ways to bet on the latter is the Global X FTSE Nordic 30 ETF ( GXF), which offers exposure to Sweden, Denmark, Norway, and Finland (of the group, only Finland has adopted the euro).

Although most major currencies have slipped relative to the dollar in recent weeks, the "euro drag" has weighed heavily on EZU. The EMU fund has lagged behind its Nordic rival over the last month, delivering a positive return to those who shorted EZU and bought GXF:

Disclosure: No positions at time of writing.
Michael Johnston is the senior analyst and founder of ETF Database, a Web-based investment resource providing actionable ETF investment ideas and an ETF Screener for investors analyzing potential ETF investments. Johnston oversees ETF Database's free ETF Newsletter, one of the most popular sources for news and commentary focusing exclusively on the exchange-traded fund industry. Johnston also maintains and develops content for ETFdb Pro, a line of analyst reports and model portfolios designed to help investors utilize ETFs to meet their investment goals.

Johnston has completed the Chartered Financial Analyst (CFA) program, and obtained his bachelor's degree in finance from the University of Notre Dame. Prior to founding ETF Database, Michael worked in a private client service group performing valuations of companies operating in a wide range of industries.

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