The situation in Greece appears to be deteriorating with banks there suffering accelerating deposit withdrawals — setting the stage for capital controls possibility as soon as Monday.
If a new bailout agreement isn’t ironed out between Athens and the European establishment soon, it’s very we’ll see a Greek default on $1.8 billion in bundled debt payments to the International Monetary Fund at the end of the month.
This is the final act of a long simmering crisis.
If things go belly up and there is a Greek default, here are three ETFs that should be big winners in the fallout.
SPDR Gold Shares (GLD)
A Greek default would get the wheels turning on an exit from the eurozone and a restoration of the drachma — proving that one of the world’s main reserve currencies is, in fact, revocable.
That would be good news for the SPDR Gold Shares (GLD), which really hasn’t been going anywhere as the recent strength in the U.S. dollar as undermined its role as a store of value when confidence in fiat currency wanes.
ProShares UltraShort Europe (EPV)
If you’re looking to actively play the situation on the short side, the ProShares UltraShort Europe (EPV) — featuring a 2x inverse exposure to the MSCI Europe Index — is your best bet. EPV is a U.K.-, Switzerland-, France- and Germany-heavy fund that features the likes of Nestle (NSRGY), Novartis (NVS) and Royal Dutch Shell (RDS.A, RDS.B).
The EPV surged more than 40% during the last big Greece debt scare in 2012.
VelocityShares Daily 2x VIX Short Term ETN (TVIX)
Finally, a messy end game for the situation in Greece would end the six-month-plus stasis the U.S. stock market has been in. The Dow Jones Industrial Average continues to flirt with the 18,000 level, a threshold first hit in December.
An uptick in price movement will lift the CBOE Volatility Index, or VIX, which in turn will lift the leveraged VelocityShares Daily 2x VIX Short Term ETN (TVIX) fund I’ve recommended to Edge subscribers.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers. Clink the links above to sign up.
