Ireland's market has jumped back in a big way following the nation's housing crisis in 2010. Housing costs sparked a banking crisis that left the economy and fell by over half.
The nation has since paid back its bailout funds with new bond issuances and reached an annualized gross domestic product(GDP) growth rate of approximately 7.8% in 2015.
In this article, we'll have a look that investors may want to revisit the nation as a potential chance in 2016 and 2017.
1. The Euro is Moving Lower
The U.S. Federal Reserve's decision to increase interest rates by 25 basis points in December 2015 and the European Central Bank's decision to enlarge its simple money policies both helped the euro proceed to new lows against the dollar that appear poised to last in 2016 and 2017.
The government predicted the stimulating euro exports hastened the natural bounce-back of the economy, which its GDP would expand by 6 percent in 2015. Additionally, the weak euro has enabled the nation to recently sell a $1 billion value of 15-year debt at a near record low rate of interest of 1.8 percent. These funds are used to support spending that claims to further foster the economy.
2. Ireland has Favorable Policies
The coalition government of Ireland promised a second year of small tax cuts in 2016, with a $750 million bundle.
These tax cuts had been matched with an identical sized public spending bundle.
These motions must help keep the nation's recovery by powering employment and consumer spending moving in the perfect direction. With unemployment staying at around 9.5 percent, there's still a great deal of slack in the labor market that could be productively employed to additional progress GDP increase in the Eurozone's major market.
Critics argue, however, that the government nevertheless suffers from a relatively large debt burden that it should first address.
3. Employment is Improving
Ireland has seen its unemployment rate steadily drop from almost 16 percent to about 9.5 percent during 2015, as the market continues to pick up steam. Of course, these trends should continue to encourage consumer spending and reduce household debt.
The country should continue to see the gain as multinationals boost their investments inside its borders. According to a report, U.S. multinationals alone will create 14,000 jobs in Ireland over the next two years since the labor market has slack and the country's tax policies are one of Europe's very favorable.
Many emigrants are returning home to take advantage of the economic recovery of the country.
How to Invest in Ireland
There are several different ways for U.S. investors to build exposure to Ireland's market through exchange-traded funds (ETFs). With over $101 million in funds, as of November 2016, the iShares MSCI Ireland, Capped ETF is the hottest fund in the area.
The fund is composed of broad-based index formed with Irish companies with a 0.48 percent cost ratio and a 1.53% trailing 12-month return, as of November 30, 2015.
In addition to this ETF, investors may also need to consider the New Ireland Fund Inc., that is a $75 million closed-end fund centered on Irish stocks. The fund is worth at least 80% of its current assets in Irish debt and equity securities with Klein Benson Investors International Ltd.
Serving as the investment adviser for the fund. For income investors, the appealing 1.62% dividend return might be a persuasive advantage versus the ETF alternative.
Ireland's housing market has been steadily improving over the last few decades, after one of the worst housing crises in the world in 2010.
There are lots of catalysts that investors might wish to think about that could drive Irish equities higher in 2016 and beyond.
U.S. investors can assemble exposure to such securities through both ETF and closed-end fund choices that trade on markets that are popular.