theglobeandmail.com
Greek ETF Investment Yields 109.2% Gain
The Contra the Heard Investment Newsletter details its successful investment in the Global X MSCI Greece ETF (GREK-A), realizing a 109.2% gain after holding the position since October 2015, highlighting Greece's economic recovery and its strategy of global diversification.
- What are the key long-term risks and challenges facing the Greek economy, and how might these factors affect the future performance of the GREK-A ETF?
- Greece's ongoing challenges, such as high debt-to-GDP ratio, corruption, and inefficient legal system, present risks despite the economic recovery. The country's poor demographics, including low fertility rates and an aging population, pose long-term concerns that could impact future growth. However, the current positive economic momentum and low valuations suggest further potential for the GREK-A ETF.
- What is the primary investment strategy employed by the Contra the Heard Investment Newsletter, and how did its investment in the Global X MSCI Greece ETF (GREK-A) exemplify this strategy?
- The Contra the Heard Investment Newsletter trimmed its position in the Global X MSCI Greece ETF (GREK-A) after a 109.2% gain, having initially invested in October 2015 during the Greek financial crisis. This decision recouped their initial investment, leaving a portion for potential future appreciation. The ETF tracks the MSCI All Greece Select 25/50 Index and offers a yield of over 4%.
- How did the economic conditions in Greece at the time of the initial investment in GREK-A differ from the conditions at the time of the partial divestment, and what factors contributed to this change?
- The investment in GREK-A exemplifies the newsletter's strategy of avoiding home-country bias and seeking global diversification. The successful turnaround of the Greek economy, marked by reduced debt, unemployment, and non-performing loans, fueled the ETF's significant growth. This contrasts with the initial investment during a period of severe economic hardship and high uncertainty.
Cognitive Concepts
Framing Bias
The narrative frames Greece's economic turnaround as a resounding success story, emphasizing positive developments and downplaying or minimizing persistent challenges. The headline and introduction highlight the impressive gains from the GREK ETF, setting a positive tone that influences the reader's interpretation of the overall situation.
Language Bias
While the article uses some positive language to describe Greece's recovery (e.g., "resounding success," "growth story"), it also incorporates neutral and even negative terms (e.g., "congested and inefficient mess," "poor demographics") to provide a balanced perspective. Therefore, the language bias is minimal.
Bias by Omission
The article focuses heavily on the Greek economy's recovery and the performance of the GREK ETF, but omits discussion of other international investments in the portfolio. This omission prevents a complete understanding of the portfolio's overall overseas investment strategy and diversification.
False Dichotomy
The article presents a somewhat simplistic view of the Greek economy, contrasting its recent successes with lingering challenges. While it acknowledges risks, it leans heavily towards a positive outlook without fully exploring the complexities of the situation or alternative perspectives on the country's future.
Sustainable Development Goals
The article highlights Greece's significant economic recovery, including a drop in unemployment from 25% to under 8%, a reduction in non-performing loans in the banking sector, and a government surplus. These factors directly contribute to decent work and economic growth. The recovery is further supported by reforms that streamlined regulations and reduced tax avoidance, fostering a more favorable business environment.