Germany's Benchmark Index — the DAX40 — has been among the biggest victims of the Russian-Ukrainian stand-off — falling by -4.5% over the past week and -7.1% this year. Among notable decliners in the index this year are SAP (-19.54%), Siemens Healthineers (-19.39%), Zalando SE (-18.48%), Puma SE (-17.13%), and Linde PLC (-16.04%).

Germany is the biggest buyer of Russian gas in the world — drawing more than half of its gas imports from Russia through the Nord Stream pipeline and Yamal-Europe pipeline, against around 40% on average for the European Union, according to the EU's statistics agency Eurostat. Recently, Germany has taken steps to halt the certification of the Nord Stream 2 gas pipeline from Russia as the West prepares sanctions against Moscow. The ramifications could be devasting to the German and European energy markets and could potentially ripple through the broader markets.

German Equities ETFs tag along

Year-to-date, German Equities ETFs globally have witnessed net outflows of $334 million (excluding short or leverage) and fell over -5% on average as investors expect tensions to flare at the Russian-Ukrainian border.

Investing in America-domiciled German Equities ETFs

Investors can gain exposure to German Equities through the largest America-domiciled German Equities ETF, the iShares MSCI Germany ETF (EWG, $2.35 billion in assets). The fund seeks to track the MSCI Germany Index and provides exposure to large- and mid-sized companies in Germany. In terms of sector exposure (as of Feb.18), Consumer Discretionary has the biggest slice (18.46%), followed by Industrials (17.25%), Financials (15.64%), Information Technology (12.04%) and Healthcare (11.15%). The fund has 61 holdings, highlighted by SAP (8.26%), Siemens N AG (8.06%), Allianz (6.82%), Mercedes-Benz Group (5%), BASF N (4.78%), and Deutsche Telekom N AG (4.40%). The fund has a total expense ratio of 0.50% and trades primarily on the NYSE ARCA. 

For direct exposure to Germany's benchmark index, the DAX, Global X DAX Germany ETF (DAX) could be a viable option.

Investing in Europe-domiciled German Equities ETFs 

There are plenty of ETF options for European investors to gain exposure to a broad basket of Germany Equities. Among these options are the iShares Core DAX UCITS ETF (DAXEX), Xtrackers DAX UCITS ETF (XDAX), Deka DAX UCITS ETF (ETFDAX), Lyxor Core DAX (DR) UCITS ETF (CBDAX), and Amundi ETF DAX UCITS ETF (CG1). CG1 has been among the most popular this year, receiving €116 million from investors (as of Feb. 18). Meanwhile, the XDAX witnessed net outflows of €230 million during the same period.

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