The WIG ETF (Lyxor) replicates the WSE20 index of the top 20 Polish stocks.
It is therefore a fairly narrow index, which is highly dependent on the financial sector (45% of capitalization) and energy (21%), followed by consumer discretionary (10%) and commodities (10 %).
The top 10 stocks, where there are many banks and some industrial stocks, account for 70% of the index's capitalization. This tracker embarks the risk linked to the Zloti, which can be influenced by external factors (ie. aggressive attitude of Russia).
ETF fees are slightly higher than the average of our sample and amount to 0.45% coupled with an AUM of 36M€.
Poland has developed dramatically over the last 25 years and has become an important player in the European Union. In 2015, economic growth reached 3.5%, strengthened by a 3% increase in domestic demand and then reached 2.8% in 2016, supported by solid growth in investment and consumption. A member of the European Union since 2004, Poland was the only country in the EU to maintain positive growth during the financial crisis, GDP reached $ 509 billion in 2016 (23rd place worldwide).
Russia's actions against Ukraine since the beginning of 2014 have placed the issue of security on the political agenda. Internal reforms will be needed to enable the country to benefit fully from the EU's financial transfers.
In Poland, agriculture employs 11% of the active population and contributes to 3.4% of GDP, the country is relatively rich in natural resources and the main minerals produced are coal, sulfur, copper, lead and zinc. Manufacturing contributes about 33% of GDP, while the tertiary sector accounts for about 64% of GDP. Traditional industrial sectors such as iron and steel and shipbuilding are in decline. The main industrial sectors of the country are machine manufacturing, telecommunications, environment, transport, construction, industrial food preparation and information technology. The expanding services sector includes financial services, logistics, hotels, utilities and information technology. Poland is a country that is open to foreign trade, which accounts for the bulk of GDP.
The geographical location of Poland gives it strategic importance. It is located halfway between Paris and Moscow and between Stockholm and Budapest and has important ports which are linked to the North Sea thanks to the Baltic Sea. Moreover, the country is a favorable place for the export of goods to the former Soviet republics. Since Poland's accession to the European Union, its exports have increased by more than 30%, especially towards Russia.
Structurally in deficit, Poland's trade balance has tended to improve since 2012, with a recovery in exports coupled with weak domestic demand. Since the first half of 2015, Poland's trade balance has become positive, with exports increasing more rapidly than imports. Since the eurozone crisis, the CIS countries and China are increasing destinations of Polish exports. The country's three main trading partners are Germany, England and the Czech Republic.
The prospects for GDP growth in Poland are excellent for 2017 at 3.6%. The WIG benefits from the market surge of its refiners (PKN Orlen and Gruppa Lotos) in a context of low crude prices, as well as the firmness of its banks the main beneficiaries of the economic situation. The strength of Polish civil society and the heightened surveillance of Europe, less feared the consequences of the authoritarian drift of the government currently in place.
