NEW YORK (TheStreet) -- A possible sign of the slow return to normal is underway in the European Union in 2013 could be the surprising performance of the equity markets in the PIGS countries. PIGS was the derogatory acronym given to Portugal, Italy, Greece and Spain during the financial crisis and still sticks with them as they work through various political and fiscal obstacles on the way to recovery.
Portugal's PSI 20 Index is up 16% for the year to date. Last week Global X launched the FTSE Portugal 20 ETF (PGAL), which is the only fund in the U.S. market offering exposure.
Five years ago Northern Trust offered a Portugal ETF through its NETS product line of single-country funds -- it was subsequently shut down after just a few months of trading. That Northern Trust fund and the new Global X fund both track similar indexes, with each having 20 holdings.
But there has been a lot of change in the makeup of the index since the financial crisis.
In 2008 the financial sector was the largest in the index at 26% compared to just 15% now. Utilities is the largest sector in PGAL with a 20% weighting followed by consumer services at 23%. Financials and energy at 14%.
Now, as then, the largest holding in the fund is Energias de Portugal (EDPFY), which currently has a 20% weighting in the fund. The top three holdings account for 47% of the fund.
That heavy of concentration is not ideal in terms of constructing an index fund but many smaller markets have smaller indexes and smaller indexes are frequently dominated by just a few companies. The iShares MSCI Denmark Capped ETF (EDEN) has a 20% weighting in Novo Nordisk (NVO) as another example of this type of concentration.