Nadig: Why I Bought Spain-Focused EWP

Nadig: Why I Bought Spain-Focused EWP

The country’s high unemployment rate is a big opportunity; just ask the French.

Reviewed by: Dave Nadig
Edited by: Dave Nadig

The country’s high unemployment rate is a big opportunity; just ask the French.

I’m pretty cautious when it comes to my personal investing. As someone who’s covering the ETF industry, it’s honestly just cleaner and easier to limit my ETF holdings so nobody can ever accuse me of trying to “talk my book.”

Of course, the very idea that “talking one’s book” about an ETF holding hundreds of securities is a bit nutty, but still, old habits die hard. For that reason, most of my long-term, buy-and-hold money is locked up in retirement accounts that don’t actually feature ETFs as viable options (yet!)

More to the point, however, I’m a very firm believer in investing for the long haul. I’ve been a trader. I’ve sat on a desk and stressed over earnings calls and Fed announcements, and while I still love following those things, I no longer really even think about acting on them. My time horizon is firmly measured in decades.

This week, however, someone asked me point blank: “Dave, you write about ETFs all the time; do you actually ever trade them?” So I thought I’d mention a recent ETF buy I made based on the insights from the folks in our Alpha Think Tank. Lest you think this is cherry-picking, these are quite literally the only portfolio moves I have made in the last year.

Spain’s Rise From The Grave

The first is the iShares Spain ETF (EWP | B-94).

When we launched the Alpha Think Tank back in February, our inaugural issue featured my ex-partner, Don Luskin, of Trend Macrolytics. Don’s one of those “love him or hate him” guys, but he’s unquestionably one of the smartest market-followers I’ve ever known. Back in February, here’s what he said about Spain in the Alpha Think Tank:

“Yes, they have a 25 percent unemployment rate. But you’re talking about a country that has washed away decades-old labor laws that were literally put in place under the fascist regime of General Franco. You turn that loose and now a 25 percent unemployment rates is pure opportunity, because now you’ve got a lot of hungry people who would be very happy to build cars. 

“In fact, they’re so good at building cars, so cheap, that French automakers—which are in part state owned—have been firing workers in France and building new factories in Spain for these low-wage, desperate-to-work, free-to-work Spanish workers. And now they’re making French cars on Spanish soil so cheaply that they export them to China. Is that a story or is that a story?”

I’ll be honest: I hadn’t thought much about Spain before I read that, so I started doing my own research. In retrospect, that was a mistake. In three days, I decided I agreed with Don and pulled the trigger.


Chart courtesy of

If I’d just read his thoughts and bought, I’d be up more than 14 percent right now. As it is, I’m only up about 12 percent. I’ll take it. EWP is a solid fund that trades well, and is our Analyst Pick for getting exposure to Spain. It’s a bit pricey at 53 basis points, and its tracking has at times been a little wonky, but it gets the job done.

I’ve continued to hold Spain, as it’s been a call reiterated by Nouriel Roubini and Tom Dorsey in recent issues of Alpha Think Tank, and Don re-upped on his opinion in the most recent issue.

For a conservative guy like me, this is an enormously tactical trade. I actually took a position in an individual country, instead of a broad, multiyear asset-class bet, and since I’m putting it on the table, I’ll be sure to comment when I take it off. Given my time horizon, however, we’ll likely have had one or two new presidents by then.

At the time this article was written, the author held a long position in the security mentioned. Contact Dave Nadig at [email protected].


Prior to becoming chief investment officer and director of research at ETF Trends, Dave Nadig was managing director of Previously, he was director of ETFs at FactSet Research Systems. Before that, as managing director at BGI, Nadig helped design some of the first ETFs. As co-founder of Cerulli Associates, he conducted some of the earliest research on fee-only financial advisors and the rise of indexing.