Market Overview

Checking In: Getting to The Greek

There were scores of new ETFs introduced in 2011. Over 300. In fact, 2011 saw the most new exchange-traded products introductions on record, topping the 291 new ETFs and ETNs that were rolled out in 2011.

There were certainly controversial and criticized funds among last year's rookie class. There were also gutsy introductions and among that group we would place the Global X FTSE Greece 20 ETF (NYSE: GREK).

Now, on the cusp of turning one month old, the Global X FTSE Greece 20 ETF is home to just over $2 million in assets under management. There's a little caveat that applies to some Europe ETFs and it applies to the newly minted GREK: Not bad all things considered.

It's not all things considered that GREK has landed $2 million in AUM. We might venture to say it's pretty darn impressive average daily volume is over 3,200 shares since the ETF debut. And the fact that GREK is only slightly lower since its debut is, you guessed, not bad all things considered.

Now, let's not sugar-coat things. This is still an ETF tracking Greece we're talking about. If GREK had come to market in 2010 or early last year, a reverse split may have been necessary to keep the ETF from going to zero. Not to mention, the ETF is still vulnerable to headline risk and a potential departure by Greece from the euro.

In the case of the potential euro departure, that's pure speculation at this point. Since it's debut, GREK has been outperformed by the iShares MSCI France Index Fund (NYSE: EWQ), the iShares MSCI Germany Index Fund (NYSE: EWG), the iShares MSCI Belgium Index Fund (NYSE: EWK) and the iShares MSCI Italy Index Fund (NYSE: EWI).

However, those that opted for the iShares MSCI Spain Index Fund (NYSE: EWP) over GREK would be sorely disappointed as GREK has sharply outperformed its Spanish rival.

At this point, there are three ways to look at GREK and Greek equities. First, one can either short them. Second, stay away completely. Finally, realize that not all Greek stocks are bad, a bottom may be close (or already established) and that are a couple of decent Greek stocks that are found in GREK. Call option on a potential rebound in Greek equities? GREK might be the best bet.

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