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The iShares S&P Europe 350 Index (ETF) In Focus (IEV)

in focus spotlightThe European economy is gradually witnessing broad-based growth. Thanks to reduced debt worries, strong growth in some of the key member nations and solid data, the European economy nicely rebounded from the final quarter of last year.

Euro zone business activity during the second quarter has seen a solid start – the fastest in almost three years.

This is especially true as the Markit’s Composite Purchasing Managers Index for the Euro zone rose to 54.0 in April from 53.1 in March. Business activity is picking up even in the weaker Euro zone nations such as Spain and Ireland. Growth in these two nations is the fastest in at least the last six years.

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Moreover, thanks to a boost in new orders, the index for the Euro zone service industry rose to a 34-month high of 53.1 in April from 52.2 in March. The most important thing to be noted is that the services business activity is showing growth across the board – France, Germany, Italy, Ireland and Spain all grew for the first time since May 2011 (also see Direxion Debuts Leveraged Europe ETFs).

Adding to the joy, the 28-nation European Union (EU) is expected to expand by 1.6%, as per European officials. If so, this would mark a sharp uptick after just 0.1% growth in 2013.

For 2015, the economy is expected to expand at an even higher rate of 2%. However, investors should also note that rising geo-political tensions with Russia, a sustained period of low inflation and lack of structural reform could still impact the economy.

Though at a near record high, unemployment across the 28-nation EU fell to 10.5% in March from 10.9% in the year-ago month. Unemployment, however, remained stubbornly stable with February levels. However, unemployment is expected to drop to 10.1% in 2015, according to EU officials.

Solid business, rising exports, stronger currency and falling unemployment make for a rewarding combination. A look now at European Equity ETFs could be a good idea to capture this surge, especially so if it is backed by a solid Zacks ETF Rank.

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