The May 2017 election of Emmanuel Macron as France’s new president ushered in a turnaround for the French stock market. Even so, the young leader will have to work hard to implement the tough reforms needed to further lift the French economy out of stagnation.

ISHARES MSCI FRANCE ETF $31 (New York symbol EWQ; TSI Network ETF Rating: Aggressive; Market cap: $781.0 million) tracks the performance of the largest publicly listed French companies.

The ETF holds a well-diversified portfolio of 80 stocks. Industrials account for 21% of its assets, while Consumer Goods (21%), Financials (17%) and Healthcare (9%) are other key segments.

The fund’s largest 10 holdings make up 45% of its assets. They are Total SA (oil refining, 8.2%), Sanofi (pharmaceuticals, 6.1%), BNP Paribas (financial, 5.2%), LVMH (luxury goods, 5.1%), Airbus (aircraft, 3.6%), AXA SA (insurance, 3.7%), L’Oreal SA (cosmetics, 3.3%), Air Liquide (industrial gases, 3.3%), Vinci SA (construction, 3.2%) and Schneider Electric (industrial conglomerate, 3.1%).

The ETF started in March 1996 and has an MER of 0.49%. With an average of $27.8 million in units trading daily, the $781.0 million fund provides strong liquidity. It has a p/e of 14.8 based on its forward earnings.

The French economy has stagnated over the past decade, in part because of its nearly 10% unemployment rate— by contrast, the eurozone’s average unemployment rate is 8.7%. In addition, by the end of 2016, government spending as a percentage of GDP was the highest in the EU. France’s corporate tax rate was also a third higher than the EU average. Moreover, the economy’s share of global trade in 2016 was only half of what it was 20 years ago.

Backed by a comfortable majority in the legislative assembly, Macron and his En Marche! party have launched an ambitious reform program. Their key objectives fall into three main categories:

1) Government spending: Reduce government spending as a proportion of gross domestic product and lower the fiscal deficit. Specific actions include cutting 120,000 government jobs at both the central and local levels.

2) Employment: To drive drive down unemployment and improve labour market flexibility, Macron plans to lower employer costs around hiring and laying off workers.

3) External competitiveness: The government aims to lower the corporate tax rate and enhance the country’s ability to compete in export markets.

In September 2017, the President signed five decrees reforming the labour rules. The decrees limit payouts for dismissals, give companies greater freedom to hire new workers and to set working conditions. The first budget of the new government also reduced taxes and lowered government spending.

The IMF estimates that a full implementation of the planned tax, labour and product market reforms could see GDP growth increase to 1.9% by 2019 compared to 1.2% in 2016. Unemployment would likely decline with the achievement of those targets. The government’s finances could also improve to deliver a balanced budget by 2022.

Whether the new president will be able to deliver on his reform objectives remains to be seen, but equity market investors are starting to factor in a good outcome for the French economy and its major companies.

In early 2017, France turned the page on a decade of stock market underperformance. Since then it has outperformed global markets (see graph). In absolute terms, the iShares France ETF gained 33.9% over this period.

For aggressive investors who want exposure to France, the iShares MSCI France Index ETF is a sound choice.