ETF XRAY

iShares MSCI France Index (EWQ)

Below are two interesting charts that our regular readers may find interesting. The first is the growth of a 100 share position in EWQ over the last 17 months with 2007 YTD gains highlighted in yellow. The second is a summary view of European ETFs. Keep in mind that the returns listed under the % column goes back to January 3, 2006. The only ETF that has had a recent downturn is EWO Ishares Msci Austria Index Fund, however the per share value point and figure chart is still in a colum of X's.

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By DE Smith | MyPortfolioView

French Election Should Drive ETF

The impressive victory of Mr. Sarkozy in the French Presidential runoff as I predicted is great news for investors in the France exchange-traded fund (EWQ). Conservative Nicolas Sarkozy triumphed in France's presidential election on Sunday, sweeping aside his Socialist rival Segolene Royal and winning a powerful victory. The magnitude of his win will give him a strong mandate to promote his agenda of cutting taxes and spending coupled with other market reforms.

He will take power on May 16, becoming the first French head of state to be born after World War II. He will then name a government and start campaigning for June's parliamentary election. Most analysts expect his UMP party to retain its majority, giving Sarkozy a good chance of pushing through his economic and social reform programme.

Despite its image of a bureaucratic, slow growth economy, France is home to ten of the largest fifty firms in Europe and has some first class multinationals.

By Carl Delfeld of the Chartwell ETF Advisor

France's Election and ETF

Money and politics are crossing in France as the first stage of its Presidential election approaches and investors look ahead to decide what impact it will have on the France exchange-traded fund (EWQ).

Nicolas Sarkozy, France's main centre-right candidate and front-runner in the polls and Ségolène Royal, the Socialist candidate, will most likely survive the first round and meet each other head to head in the runoff two weeks later.

It does matter a great deal to markets who wins since both candidates offer approaches that are fairly stark and wide apart. Given France's slow growth, high tax and high unemployment rate, the election of Mr. Sarkozy would likely ignite a market rally for the market and ETF which has not done badly so far this year, up 8.55%. On the other hand, a victory by Ms. Royal could rattle markets and lead to uncertainty.

While many American investors seem to think that France is becoming nothing morte than a tourist attraction, keep in mind that ten of the largest fifty companies in Europe are headquarted in France. They look to the world, not France, for their growth and profits.

My call is Sarkozy over Royal, 52% to 48%.

By Carl Delfeld of the Chartwell ETF Advisor