Australia ETF Could Face A Surprising Headwind

The iShares MSCI Australia ETF (NYSE: EWA), the largest Australia exchange traded fund listed in the United States, could contend with an issue often reserved for single-country ETFs devoted developing economies: credit risk. Strength in Australian stocks has been facilitated by accomodative monetary policy by the Reserve Bank of Australia. While the Australian economy has dodged a recession for more than three decades, at least one major ratings agency believes the country’s AAA credit rating could be imperiled if the economy there weakens.