Europe ETFs: The Good, The Bad, The Ugly

by on June 14, 2012 | ETFs Mentioned:

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 (VGK) at 0.14%, followed by the SPDR DJ Euro STOXX 50 ETF (FEZ) and the SPDR DJ STOXX 50 ETF (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:

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 (EWG), which has an average daily volume of about 5 million shares.

Realtime Ratings: Europe Equities ETFs
Metric Top ETF Rating
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:

Best Performers
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):

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.

Disclosure: No positions at time of writing.