Diversify Your Portfolio with European ETFs

Investing in Europe can be a good way to diversify your portfolio as Europe has some of the largest and stable economies in the world, and many of these European ETFs have decent yields. You can invest in the entire continent of Europe or you can invest in individual countries with European ETFs, which is easier than having to research the individual companies of each European country.

Investing in European ETFs

If you are interested in investing in Europe as a whole, the following European ETFs invest in the large and mid-cap companies of Europe.  These ETFs also have the benefit of a nice yield, which is a big plus in this low interest environment. The majority of these ETFs have an expense ratio below 0.60%.
  • (VGK) Vanguard FTSE Europe tracks the MSCI European index and has a current 12-month yield of 3.56%. As with most Vanguard ETFs, this one has a low expense ratio at 0.12%. This ETF invests in mainly large companies from 16 European countries, concentrated mainly in the UK, France, Germany and Switzerland. They have recently added some medium and small cap stocks. 
  • (IEV) iShares Europe follows the S&P Europe 350 Index and will give you a broad exposure to European stocks. The 12-month yield is currently 3.06%.
  • (FDD) First Trust STOXX Euro Select Dividend Index tracks the STOXX Euro Select Dividend 30 index, this index is made up of 30 high dividend paying stocks out of the STOXX Europe 600 Index. The 12-month yield is currently 4.61%.
  • (EZU) iShares MSCI  Eurozone Index corresponds to the MSCI EMU index. EMU Index stands for European Economic and Monetary Union. This ETF invests at least 80s% of its assets in stocks of this index. The 12-month yield is 2.38%.
  • (FEZ) SPDR Euro STOXX 50 tracks the STOXX Europe 50 Index, European blue chip Index, and currently has a 12-month yield of 3.34% and an expense ratio of 0.29%.
  • (EUFN) iShares MSCI Europe Financials Index invests mainly in financial, insurance and diversified financial companies in Europe. Their holdings are mainly in the UK, Germany Switzerland and Spain. They currently have a 12-month yield of 4.34%.

Individual European Country ETFs

If you would like to invest in certain countries in Europe, you can buy European ETFs for individual countries in Europe to further diversify your portfolio. 

  • iShares MSCI United Kingdom Index (EWU) invests at least 90% of its assets in companies that are traded mainly on the London Stock Exchange. This ETF has a 12-month yield of 4.41%. Some of their larger holdings include HSBC Holding, Vodafone, GlaxoSmithKline and BP.
  • iShares MSCI German Index Fund ETF (EWG) invests in stocks that are mainly traded on the Frankfurt Stock Exchange and include Siemens, BASF, Bayer, Daimler and Deutsche Bank. EWG has a 12-month yield of 2.15%.
  • iShares MSCI France Index (EWQ) consists of stocks that are mostly on the Paris Stock Exchange with a 12-month yield of 2.38%. Their larger investments include Total SA, Sanofi and BNP Paribas.
  • iShares MSCI Switzerland Index (EWL) invests in stocks that are traded on the MSCI Switzerland 25/50 Index and include large well-known companies such as Nestle, Roche and Novartis. This ETF has a 12-month yield of 2.81%.
  • iShares MSCI Italy Index (EWI) tracks the MSCI Italy index with a 12-month yield of 2.79%.
  • iShares MSCI Spain Index (EWP) invest in stocks primarily traded on the Madrid Stock Exchange such as Telefonica SA and Banco Santander SA. This ETF has a 12-month yield of 4.31%, which is down considerably since the credit worries of Spain several years ago.
  • Global X Norway (NORW) corresponds to the performance of the MSCI Norway IMI 25/50 Index. Their larger investments include Statoil ASA, Telenor ASA and Seadrill. The 12-month yield is 3.99%.
  • iShares MSCI Austria Investable Index (EWO) tracks the MSCI Austria Investable Market Index (IMI) and consists mainly of companies traded on the Vienna Stock Exchange. The 12-month yield is 1.66%.
  • iShares MSCI Netherlands Investable Market Index (EWN) invests in stocks on the Amsterdam Stock Exchange in companies like Unilever, ING Groep and Heineken.
  • iShares MSCI Ireland Cppd Investable Market Index (EIRL) is a low volume ETF that tracks the MSCI Ireland Investable 25/50 index and invests in companies including CRH PLC, Elan Corp, Kerry Group and Bank of Ireland. Their 12-month yield is 1.88%.

Leveraged and Inverse European ETFS

You can also trade in leveraged or inverse European ETFs.
  • ProShares Ultra MSCI Europe (UPV) is a 2x (200%) leveraged ETF that corresponds to twice the daily return of the FTSE Developed Europe Index.
  • ProShares UltraShort MSCI Europe (EPV) is a 2x leveraged inverse ETF. This ETF attempts to correspond to two times the inverse (-2x) of the daily performance of the FTSE Developed Europe Index.

European ETFs Conclusion

This list of European ETFs will give you some good investing ideas if you should decide the time is right again for you to invest in Europe and add them to your portfolio. All of the above yields are as of March, 2016.

Copyright © Sam Montana 2012-2016

No comments:

Post a Comment