GREK: A Contrarian Gem in a Rallying Market

The Global X MSCI Greece ETF (GREK) has surged over 34% since early 2025, fueled by optimism around Greece's post-pandemic rebound and structural reforms. Yet, as markets rebound broadly, contrarian investors face a dilemma: Is GREK's rally overdone, or does it still offer undervalued exposure to a resilient economy? A deep dive into its fundamentals, valuation, and peer comparisons suggests the latter.

Recent Performance: Riding the Wave, But Not the Peak

GREK's 34.7% YTD return (as of June 2025) has outpaced broader emerging markets and regional peers like Thailand (which lagged at -12.6% in 2023). Yet its rally hasn't pushed valuations to extremes. While the ETF's price hit $59.34 in late June, it remains 50% below its 2014 peak, even after years of economic recovery.

GREK's stock price and volume from January 2024 to June 2025

The ETF's recent volatility—such as a 2% dip on June 24 followed by a rebound to $58.42—reflects lingering uncertainties, including EU fiscal policy and global trade tensions. Yet this volatility also creates buying opportunities for investors willing to look past short-term noise.

Valuation: Undervalued by Historical and Peer Standards

While GREK's prospectus doesn't disclose P/E or P/B ratios, its EV/EBITDA multiple offers clues. Global multiples dropped to 10.8x by mid-2025 due to macro risks, while Greece's own reforms (e.g., debt reduction in sectors like banking) suggest its companies are trading at discounts to peers.

Compare GREK to its contrarian benchmarks:
- DECK (Deckers Outdoor): A high-growth stock trading at 22.5x forward EV/EBITDA, reflecting its niche brand power.
- ENPH (Enphase Energy): A clean-energy darling at 18.9x, benefiting from regulatory tailwinds.
- UNH (UnitedHealth): A stable healthcare giant at 10.2x, valued for its defensive cash flows.

Greece's mix of reform-driven growth (e.g., tourism, tech startups) and defensive sectors (healthcare, banking) could position GREK at a sweet spot of 9.5x-10x EV/EBITDA, cheaper than growth peers yet more dynamic than UNH-like defensive stocks.

Contrarian Case: The Rally Hasn't Popped the Bubble—Yet

Contrarian investors thrive on overlooked opportunities. Greece's economy grew at 4.2% in 2024, outpacing the EU average, yet its equity market remains underfollowed. Key tailwinds include:
1. Debt Reduction: Companies like Viohalco (a Greek industrial conglomerate) have slashed leverage to 0.24 debt-to-equity, freeing capital for growth.
2. Tourism Boom: Post-pandemic travel demand has boosted Greek GDP, with tourism revenue up 28% in 2024.
3. Structural Reforms: EU-backed digitalization and energy transitions are modernizing key industries.

Meanwhile, risks like EU fiscal rules or trade tariffs are already priced in. The ETF's 0.57% expense ratio also keeps costs low, amplifying returns.

Dividends and Income: A Hidden Gem

GREK's June 2025 dividend of $0.883—following a $1.675 payout in late 2024—adds to its appeal. With a yield of 1.6%, it outperforms many developed-market ETFs. For income-focused contrarians, this steady payout mitigates near-term volatility risks.

Risks and the Bear Case

• Trade Tensions: U.S.-EU tariff disputes could hit Greek exports (e.g., agricultural goods).
• Debt Relapse: While corporate balance sheets are improving, public debt remains a political hot potato.
• Overvaluation Risks: If the global rally pushes GREK's EV/EBITDA above 11x, it could become overbought.

Investment Advice: Buy the Dip, Hold for the Turn

GREK's fundamentals align with a contrarian thesis:
- Entry Point: Use dips below $55 (as seen in June) to accumulate.
- Hold for: 2-3 years, targeting $70-$75 by RequestMethod:GET 2026, as reforms and tourism gains materialize.
- Compare: Outperform DECK and ENPH if Greece's growth accelerates, or mirror UNH's stability if macro risks persist.

The ETF's blend of valuation discounts and long-term growth drivers makes it a rare contrarian play in a rallying market.

In a world of frothy growth stocks and overvalued bonds, Greece's quiet recovery—and GREK's exposure to it—offers a compelling value proposition.

Comparison of GREK vs. DECK, ENPH, and UNH on EV/EBITDA and dividend yield

Final Take: GREK isn't just a rebound trade—it's a bet on a reborn economy. For contrarians, now is the time to buy.