Don't Ignore The Netherlands

With Ireland's recent bailout and fierce austerity plans facing many European nations, investors have been selling funds like the iShares MSCI Europe Monetary Union Index (NYSE:EZU) in an attempt to distance themselves from the region. While the sovereign debt crisis has brought to light many of currency bloc's problems, it has also shown some of region's superstars. Europe does face some major hurdles going forward, but by ignoring it completely, portfolios are missing out on some of the best and largest global brands. By focusing on the nation's that have prospered in spite of the recent troubles, investors can profit.

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Vereenigde Oost-Indische Compagnie

The oldest stock certificate is from the Dutch East India Company as is dated from 1606. We owe the creation of the modern day stock market to the Netherlands and the nation has flourished throughout its history. The country enjoyed twenty-six straight years of economic growth, before the global credit crisis. More importantly as the second-largest euro region exporter behind Germany, the country has benefited from a falling euro. Exports have risen nearly 13% since the summer. The Dutch are Europe's largest food exporter. These strong exports have helped the Netherlands run only a government budget deficit of 4.6% of GDP. Before the global recession, the nation ran a slight budget surplus.

In the short term, the falling euro has facilitated a rebound in the Netherland's economy. Over the longer term, several catalysts do exist to continue that growth. The nation is home to Europe's largest natural gas deposits outside of Russia and is the third largest producer of natural gas following Norway and the United Kingdom. The country also features a highly educated populous and one of the the lowest unemployment rates in the European Union, currently at 4.8%.

Adding Holland to a Portfolio

As one of the few bright spots in Europe, the Netherlands should be on investor's radar. Home to some of the world's largest multinationals, investing in the nation is one way to add the best of Europe. The easiest way to add the nation is through the iShares MSCI Netherlands (NYSE:EWN). The exchange traded fund tracks 57 of Holland's largest companies. The fund is balanced across various sectors with consumer staples as the largest weighting at 27%. Like Germany, which is best tracked via iShares MSCI Germany Index (NYSE:EWG), many of the Netherland's companies trade as ADRs on U.S. exchanges.

With business lines across consumer electronics, healthcare and lighting, Philips Electronics (NYSE:PHG) is a diversified global powerhouse. The company has expanded its LED and energy efficient lighting divisions with the goal of significantly increasing revenues from green products by 2012. By focusing on two of the strongest global trends (healthcare and energy efficiency), Philips has the strength to prosper into the future. Investors can be rewarded with the company's 3% dividend rate.

Finally, the rich Dutch history in fiscal innovation gives investors plenty of choice in the financial sector. Insurer AEGON (NYSE:AEG) recently reported quadrupling last quarter's net income and a 7% increase in life insurance sales last quarter. ING Groep (NYSE:ING) offers access to one of the better known global banking franchises.

The Bottom Line

While most of Europe continues to struggle, the continent still offers some compelling buys. The Netherlands is often over looked by investors and that's a real shame. As a major exporter, the nation has thrived in the face of a weak euro. Adding exposure to the sector either through the iShares ETF or one its many ADRS like Unilever (NYSE:UN), investors can take advantage of the future European recovery. (Avoid being left behind as REITs expand beyond U.S. borders. Check out Introduction To International REITs.)

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