Amid growing investing turmoil, investors may be looking for options that have proven their durability. Foreign equities, specifically, have done well to start the year, while U.S. stocks have tumbled. The U.S. stock market has dropped $5 trillion in three weeks. Tariff fears as well as other government-related uncertainty have done their part to drive that sell-off. That volatility may be driving a turn toward foreign equity ETFs, with the quality Europe ETF OEUR perhaps meriting a closer look.
See more: Volatility Rising? EQL’s Equal-Weight ETF Approach Can Help
The ALPS O’Shares Europe Quality Dividend ETF (OEUR ) launched in 2015 and will hit its 10th anniversary in August. Charging 48 basis points, the fund tracks the O’Shares Europe Quality Dividend Index. In doing so, the strategy looks for large and midcap European stocks screened for low volatility, high dividend yield, and high quality.
Quality Europe ETF OEUR & Dividends
Specifically, the fund takes 500 developed Europe stocks and weights them by those metrics. What’s more, it applies a 5% weight on each constituent as well as a 22% sector weight cap to limit overexposure to big dividend-paying sectors.
Together, that has helped the fund return a solid 12.76% over the last five years, according to YCharts data. The fund is also sending a key buy signal, according to YCharts, with its $30.91 price above both its 50- and 200-day simple moving averages. That tends to indicate a notable degree of momentum for a given security.
What role could the quality Europe ETF play moving forward? The fund may offer a boost to portfolios in a satellite ETF role. Its focus on quality firms, identified by healthy dividend yields, can provide a deeper view into European equities. That can outperform those European equity funds that simply track a broad index without applying certain factors. With diversification away from the U.S. looking like a worthy idea, a quality Europe ETF like OEUR and its long-term performance can appeal.
VettaFi LLC (“VettaFi”) is the index provider for OEUR, for which it receives an index licensing fee. However, OEUR is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of OEUR.
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