Investing In Olympic Medal Winners (EWN, SPY, RSX, NORW, EWC)
The top performing countries thus far in the 2014 Winter Olympics are a mixed group that covers three continents.
The question is whether their success grabbing medals at the Olympics will result in strong results for their country’s stock market?
The small Northern European country of Netherlands is surprising sports enthusiasts around the globe by sitting near the top of the medal count. Not only is the country celebrating the medal lead, but they also have bragging rights when it comes to their stock market. The iShares MSCI Netherlands ETF (NYSE: EWN) is up 23.4 percent over the last 12 months, outpacing the other countries in the top five of the medal count.
The U.S. is currently in second place in the medal count and is not far behind the Netherlands in stock market performance. The SPDR S&P 500 ETF (NYSE: SPY)is up 21.1 percent over the last 12 months. SPY is trading just below an all-time high after what has become a typical pullback to begin 2014. Based on valuations, potential growth, and risk, the U.S. is considered one of the more attractive countries in the world going forward.
The host country of Russia is now leading the U.S. by one medal and sits atop the leader board, but their stock market performance could not be more different. The Market Vectors Russia ETF (NYSE: RSX) is down 12.9 percent over the last 12 months. The issues with the Russian economy are no secret and even though the country’s valuation is well below its average, the risk remains high for the ETF.
Of course there is a Baltic country near the top of the medal count at a Winter Olympics. Norway is leading the way for the region this time around. The country of just over five million people has had its ups and downs over the last year, as measured by the Global X FTSE Norway 30 ETF (NYSE: NORW). Throughout the volatility the last 12 months the ETF is near flat with a minimal gain of 2.6 percent. Because the ETF has 43 percent of its assets in the energy sector, the price of oil will be a major factor in the performance.
The other North American country near the top of the list is Canada, which was the host of the 2010 winter Olympics. The country is often viewed as the little cousin of the U.S. and over the last 12 months it has been the little underperforming cousin with the iShares MSCI Canada ETF (NYSE: EWC)only up 1.9 percent.
Of the countries near the top of the medal count both past performance and the outlook for 2014 the U.S. appears poised to win the stock market competition. There is a chance that Russia could turn things around, however the risk may be too high for the average investor.
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