The country has a socialist president, one of the most overbearing state sectors of any developed country, some of the highest taxes in the world, and its concept of democratic government seems to require frequent rioting in the streets by its citizens.

Vive la France!

France is a country that often seems to prosper in spite of itself, but it is also home to some of the world’s finest companies–including oil major Total (NYSE:$TOT), fashion and luxury goods powerhouse LVMH (Pink:LVMUY) and pharma giant Sanofi (NYSE: $SNY) to name a few.  Think about it.  Only the crème de la crème could survive and thrive in a place as hostile to business as France.

In the Sizemore Investment Letter, Europe has been one of my favorite hunting grounds for my “emerging markets lite” strategy.  Due to the small size of most European domestic markets and due to their old imperial legacies, European firms tend to be more globally focused.  This is an investable theme; one of my best trades in 2012 was in the shares of a French logistics company with a large and growing presence in Africa. (Due to its limited trading volume in the United States, I can’t mention it here.)

I can, however, recommend that investors take a look at the French market as a whole via the iShares  MSCI France ETF (NYSE:$EWQ).

France is cheap right now, for reasons you might expect.  Investors have placed a “Europe discount” on the entire EU as fears linger about its continued viability.  The French ETF trades for just 12 times earnings and yields 3.0% in dividends.

But as the fears of a Eurozone breakup recede with each passing day, I expect investors to warm to French stocks over the course of 2013.

I also like the fact that EWQ is weighted heavily in industrials and consumer cyclicals (17% and 15% of the portfolio, respectively).  This fits a broader theme I’ve been following of allocating to more aggressive sectors (see “Warren Buffett is Rotating into Riskier Sectors”).

Action to take: Buy shares of EWQ at market and plan to hold for 6-12 months.  Use a 15% trailing loss.

Disclosures: Sizemore Capital is long LVMH.   This article first appeared on TraderPlanet.

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