Europe ETFs: The Good, The Bad, The Ugly (VGK, EWG, EWU, EWP, EWI, GREK, FEP, DFE)
Daniela Pylypczak: To put it mildly, Europe stocks have had a rough couple of years, as the Euro Zone sovereign-debt crisis continues to plague the continent. Although allocations to this sector have understandably diminished in recent years, European equities remain a key component of many long-term, buy-and-hold portfolios, seeing as how they nicely round out international exposure as well as add essential diversification benefits [see our Euro Free Europe ETFdb Portfolio ].
For investors seeking to create a tactical tilt in their portfolios or to simply increase European stock exposure, there are a number of ETFs that offer access to this particular segment of the market. The Europe Equities ETFdb Category consists of just over 30 exchange-traded products, including both broad region and country-specific funds, as well as dividend and market capitalization-weighted ETPs.
The Pro member download from the Europe Equities ETFdb Category page can be used to highlight the Europe Equities ETFs with the lowest expenses, highest dividend yields, and best historical performance [see a sample Excel download here; Pro members can download more than 60 ETFdb Category pages and 200 ETFdb Types pages with a free 7-day trial].
|Europe Equities ETFdb Category|
|Number of ETFs||32|
|ER Range||0.14% to 0.80%|
|Total Assets||$9.4 billion|
|As of June 11, 2012|
Cheapest Europe Equities ETFs
Some funds charge as little as 14 basis points while others have expense ratios of up to 0.80% annually.
The cheapest Europe Equities ETF is the European ETF (NYSEARCA:VGK) at 0.14%, followed by theSPDR DJ Euro STOXX 50 ETF (NYSEARCA:FEZ) and the SPDR DJ STOXX 50 ETF (NYSEARCA:FEU) at 0.29%.
[Use the free ETF Screener to filter ETFs by sector and region exposure, as well as expenses and volume]
Commission Free Europe Equities ETFs
There are 11 ETFs in the Europe Equities ETFdb Category that are eligible for commission free trading, including:
- European ETF (NYSEARCA:VGK): TD Ameritrade
- FTSE Norway 30 ETF (NYSEARCA:NORW): E*TRADE, Interactive Brokers
- Europe SmallCap Dividend Fund (NYSEARCA:DFE): E*TRADE
- MSCI Germany Index Fund (NYSEARCA:EWG): TD Ameritrade
- MSCI United Kingdom Index Fund (NYSEARCA:EWU): TD Ameritrade
- SPDR DJ Europe STOXX 50 ETF (NYSEARCA:FEZ): TD Ameritrade
- MSCI France Index Fund (NYSEARCA:EWQ): TD Ameritrade
- MSCI Spain Index Fund (NYSEARCA:EWP): TD Ameritrade
- MSCI Italy Index Fund (NYSEARCA:EWI): TD Ameritrade
- FTSE Nordic 30 ETF (NYSEARCA:GXF): E*TRADE, Interactive Brokers
- FTSE Greek Index Fund (NYSEARCA:GREK): E*TRADE, Interactive Brokers
Most Heavily Traded Europe Equities ETF
Especially in the current environment, many Europe ETFs see significant trading volumes. On an average day, the ETFs in the Europe Equities ETFdb Category trade more than 12 billion shares. The most heavily traded ETF in this category is the MSCI Germany Index Fund (NYSEARCA:EWG), which has an average daily volume of about 5 million shares.
|Realtime Ratings: Europe Equities ETFs|
|Liquidity||MSCI Germany Index Fund (EWG)||A+|
|Expenses||European ETF (VGK)||A+|
|Performance||MSCI Ireland Capped Investable Market Index Fund (EIRL)||A+|
|Volatility||MSCI Switzerland Index Fund (EWL)||A+|
|Dividend||MSCI Spain Index Fund (EWP)||A+|
|Concentration||European ETF (VGK)||A+|
[Get access to Realtime Ratings for 1,400+ ETFs with a free 7-day trial to ETFdb Pro]
Best Performing Europe Equities ETFs
Europe ETFs have, generally speaking, been hammered over the past several years. Every ETF in this category is in the red over the past year and five year periods, though some have posted impressive jumps from the depths of the recession. The best performers are perhaps not unexpected; they are some of the more stable economies in the region (as of June 12, 2012): Equities ETFs are as follows:
|1 Year||MSCI United Kingdom Index Fund (EWU)||-5.9%|
|3 Years||MSCI Sweden Index Fund (EWD)||+39.3%|
|5 Years||MSCI Switzerland Index Fund (EWL)||-8.7%|
|As of June 11, 2012|
Highest Yielding Europe Equities ETFs
Europe Equities ETFs aren’t generally known for high dividend payouts, but some products in this ETFdb Category have meaningful dividend yields (as of June 11, 2012):
- MSCI Spain Index Fund (NYSEARCA:EWP): 12.86%
- Europe SmallCap Dividend Fund (NYSEARCA:DFE): 5.81%
Most Balanced Europe Equities ETFs
When comparing potential ETF investments, it is important to evaluate how deep and balanced the underlying portfolios are. Depth refers to how many individual securities comprise an ETF, while balance refers to how “top heavy” a product is–what percentage of assets are concentrated in the ten largest individual positions.
- Deepest Europe Equities ETF: The European ETF (NYSEARCA:VGK) has approximately 460 individual holdings. The FTSE Greece 20 ETF (NYSEARCA:GREK) and MSCI Ireland Capped Investable Market Index Fund (NYSEARCA:EIRL) are the “shallowest” ETFs, with 22 and 23 individual holdings, respectively.
- Most Balanced Europe Equities ETF: The Europe AlphaDEX Fund (NYSEARCA:FEP) has just 9.4% of its holdings in the top ten positions. At the other end of the spectrum, the FTSE Greece 20 ETF (NYSEARCA:GREK) has over 78% of assets in the top ten stocks.
Written By Daniela Pylypczak From ETF Database Disclosure: No positions at time of writing.