Spain ETFs Come Into Focus With Vote

Catalonia’s independence efforts are impacting U.S.-listed ETFs.

Reviewed by: Cinthia Murphy
Edited by: Cinthia Murphy

Spain is in the middle of a political crisis, which took a turn Sunday following Catalonia’s secession referendum vote. The vote on whether to have Catalonia become an independent republic was an overwhelming success for Catalan separatists, but has yet to be recognized by Spain’s central government.

Catalonia is Spain’s wealthiest region, and one that has sought independence from Spain for many years. The separatist movement has garnered strength in recent years, particularly since the financial crisis, and Sunday’s vote for independence was the latest turn of the wheel.

While Catalonia called it a victory, Spain’s central government called the vote illegal.

Spain In An ETF Lens

To U.S. investors, the immediate aftermath of the ongoing crisis in Spain is the impact on U.S.-listed funds.

The iShares MSCI Spain Capped ETF (EWP), the largest ETF in this segment, with $1.5 billion in total assets, gave back almost 2% Monday. Its currency-hedged counterpart, the iShares Currency Hedged MSCI Spain ETF (HEWP), was down roughly 1.2%. HEWP, with $53 million in assets, tracks an index of large- and midcap Spanish stocks, hedged against movements in the euro.

So far in 2017, both these ETFs had been delivering strong gains, outperforming U.S. equities, as measured by the SPDR S&P 500 ETF Trust (SPY).

EWP, in particular, aided by the currency movement, was up more than 26%. EWP is a market-cap-weighted portfolio tapping into the top 85% of Spanish companies by market cap. The fund has been raking in assets this year—investors have poured more than $728 million in net new assets into the fund year-to-date.,SPY&id=t96539387528&r=1506965561550

Chart courtesy of

Spain In A Bucket Of Funds

According to the BBC, Catalonia’s leadership isn’t “planning a ‘traumatic’ split with Spain,” but rather a “new understanding” with Spain’s central government. So far, Spain has banned the referendum vote, calling it illegal.

What happens next is unclear, with all sides, including the European Commission, calling for talks, the BBC reported. Many market participants expect more volatility ahead.

There are only two Spain equity ETFs listed in the U.S. today, but many investors access Spain as part of a broader allocation to European equities.

Some hugely popular funds in this segment include the Vanguard FTSE Europe ETF (VGK), with $17.4 billion in assets, and the iShares MSCI Eurozone ETF (EZU), with $13.6 billion. VGK is nearly 6% allocated to Spain, while EZU has Spain at more than 10%.

All of these funds will feel the impact to varying degrees of what happens next in Spain’s equity markets, depending on allocation and strategy. For a complete list of Europe equity ETFs, check out our Europe ETF channel.

Contact Cinthia Murphy at [email protected]


Cinthia Murphy is head of digital experience, advocating for the user in all that does. She previously served as managing editor and writer for, specializing in ETF content and multimedia. Cinthia’s experience includes time at Dow Jones and former BridgeNews, covering commodity futures markets in Chicago and Brazil equities in Sao Paulo. She has a bachelor’s degree in journalism from the University of Missouri-Columbia.