How Will The Spain ETF Perform in 2013?

It may not be the most pressing of questions, particularly since the ETF does not track Europe's largest economy, but some investors might be wondering if the iShares MSCI Spain Index Fund

can hold up again in 2013. In this case, "hold up" is defined as EWP only being down 2.5 percent in 2012. More impressive is the fact that the bulk of the ETF's losses were accrued in the first half of the year. Since late June, EWP has gained over 30 percent, putting the lone Spain ETF just behind the iShares MSCI Germany Index Fund

and ahead of the iShares MSCI France Index Fund

and the iShares MSCI Italy Index Fund

. Even with that rally, EWP is still sporting a dividend yield of almost 10 percent, nearly quadruple the yield on EWG and more than triple the yield on EWQ. Still, when looking at Spain's economic woes, it is fair to say that EWP has either defied conventional wisdom, is a forward-looking indicator or both. Over the past six months, 90 days and 30 days, EWP has traded higher despite Spain having

. Spain's unemployment rate was a staggering 26.2 percent in November, up from 25.8 percent in October. Spain's jobless rate has held steady or increased every month since January 2008,

. As of October, Spain's youth unemployment flirted with 53 percent. To put that number into context, joblessness among Spain's young people

. Potentially making matters worse for EWP in 2013 as well as making the ETF's 2012 fortitude all the more confounding is Spain's housing crisis. Residential real estate prices in Spain have been tumbling for five years. Amid a soaring rate of eviction, the government is working to freeze foreclosure for two years. However, two more years of falling property values and the cost to banks of maintaining foreclosed properties could hinder profits for Sareb, Spain's so-called bad bank designed to rid Spanish banks of troubled assets,

. That is not the best of news for an ETF that devotes 44.3 percent of its weight to bank stocks. In fact, Banco Santander

and Banco Bilbao Vizcaya Argentaria

alone combine for over 36 percent of EWP's weight. Spain bulls, no pun intended, would point to the fact that all of the aforementioned issues have been adequately covered by the global media, perhaps suggesting that the market should have priced soaring unemployment and tumbling property prices into EWP. They might also be apt to argue that stocks and ETFs can be forward-looking indicators. Those points are not without a little bit of merit, but positive, material change for the Spanish economy is unlikely to arrive anytime soon. That could imply EWP will not be a Europe ETF in 2013 as it was this year. One final note for traders to consider: The open interest in the July $27 EWP puts is

. That is nearly 23 times the open interest in all of the ETF's July calls combined. For more on ETFs, click

.