What Euro Crisis? Germany Near New High

We are not too far removed from the Euro Crisis that hit global economies and stock markets worldwide. Considering Germany is the largest economy in the Continent and one of the largest in the world it was directly affected by the situation.

However, at last glance the Frankfurt DAX was within 5.5% of breaking above the 2007 all-time high.

Let me repeat that: The German stock index, the Frankfurt DAX is less than 6% away from an ALL-TIME HIGH!

The chart below shows the DAX going back to 2006.

There are a few ways to play the German stock market. One is through the iShares Germany ETF ($EWG). Unfortunately it has not tracked the DAX as closely and would need to gain another 46% to get back to its all-time high set in 2007. This is due to the makeup of the index that EWG tracks; it is the MSCI Germany Index vs. the DAX.

The iShares Germany Small Cap ETF ($EWGS) is almost a year old and is a way to play the small cap stocks in Germany. The Market Vectors Germany Small Cap ETF ($GERJ) has been around since mid-2011 and is similar to $EWGS.

Since $EWGS began trading on 1/27/12 the ETF is up 20.4%. In the same timeframe $GERJ is up 18.8% and $EWG is up 16.3%. The DAX is up 18.7%. In the last year the small cap stocks have been where it is at; this makes perfect sense because as the risk-on trade expands the small cap stocks will outperform. If the trend continues expect $EWGS to continue being the leader.