The iShares MSCI Germany ETF seeks to track the investment results of an index composed of German equities, providing exposure to large and mid-sized companies in Germany.
The ETF holds a broad range of companies across various sectors, including industrials, information technology, consumer goods, healthcare, and financial services.
iShares MSCI Germany ETF Chart
As one of the most established markets in Europe, Germany is well-known for its engineering, innovation, and strong export orientation.
Launched in 1996, the ETF holds many well-known stocks and by Q1 2025 had $934 million in net assets.
iShares MSCI Germany ETF Performance
After a significant pullback between mid-June 2021 and late 2022, the ETF has rallied and recently pushed above the previous June 2021 high, reflecting the positive outlook on German stocks despite the recent economic headwinds.
| Period | Performance (Q1 2025) |
|---|---|
| Year-to-date Performance | +16.50% |
| 1-Year Performance | +10.32% |
| 3-Year Performance | +1.81% |
| 5-Year Performance | +4.26% |
iShares MSCI Germany ETF Top 10 Companies
| Company | Weight (Q1 2025) |
|---|---|
| SAP | 17.56% |
| Siemens AG | 10.16% |
| Allianz | 7.88% |
| Deutsche Telekom | 7.54% |
| Muenchener | 4.35% |
| Infineon Technologies | 2.98% |
| Deutsche Boerse | 2.86% |
| Mercedes Benz | 2.81% |
| BASF | 2.69% |
| Rheinmetall | 2.56% |
iShares MSCI Germany ETF Forecast
The Bull Argument: The recent German election is a factor that, in the near term, many bulls will point to as it has seemingly provided German stocks with a short-term boost. However, taking a longer-term outlook, Goldman Sachs said in late October 2024 that “there are signs that some headwinds facing Germany industry may begin to abate.” Given the economy’s recent struggles, turnaround signs could provide a strong boost for the stock market.
Michael Schmitz, Goldman Sachs’ co-head of FICC and Equities for Germany and Austria in Global Banking & Markets, stated: “There are reasons to believe that Germany will return to growth over the medium term, but it will be a long path.”
Overall, from a technical point of view, the current direction for the ETF, and German stocks in general, seems to be higher. However, the turnaround in the economy could really sustain that upside momentum.
The Bear Argument: However, there is always a case to be cautious. For example, the potential for the economic headwinds to continue would surely provide long-term pressure on the economy, German companies, and the ETF as a result.
In addition, the impact of US President Trump’s reciprocal tariffs may also weigh on German businesses, at least in the near to mid-term, while there are also other geopolitical risks to watch out for. Regulatory uncertainties within the European Union may also pose challenges, potentially impacting profitability and growth prospects for key sectors.
In its article, Goldman Sachs said some of Germany’s challenges are short-term, “like the past reliance on Russian natural gas. Others are more structural, like the economy’s dependence on China trade.”
Our View: The iShares MSCI Germany ETF represents an attractive opportunity for investors seeking focused exposure to one of Europe’s most robust economies.
While the ETF is subject to fluctuations and global market risks, the portfolio of high-quality, well-established German stocks offers a strong blend of capital appreciation and dividend income. For long-term investors, the sustained strength of Germany’s large- and mid-cap companies provides a solid foundation for growth.
Who Should Invest in German Large and Mid-Cap Stocks
There are various ETFs focused solely on German stocks. However, not everyone will find all of the ETFs appealing.
The iShares MSCI Germany ETF is ideally suited for:
Growth-Focused Investors: Those looking to benefit from the steady expansion and technological leadership of Germany’s top companies.
Income-Focused Investors: Investors who prioritise consistent dividend returns from established, financially robust firms.
Long-Term Investors: Those with an extended investment horizon can leverage the ETF’s stability and potential for gradual capital appreciation.
Diversification Seekers: Investors aiming to broaden their portfolio exposure with a concentrated slice of the German market will find this ETF a valuable addition.
German/European Economy Bulls: Those who are bullish on the long-term prospects of the German/European economy may want to take a further look at the ETF.
