It’s been a strong year for non-U.S. equities, with Europe equities being one notably strong area for performance. A Europe equities ETF could provide a potentially more reliable and focused alternative to a broader international equities ETF. GSEU, for example, is on something of a performance hot streak. It could intrigue as a diversifier and performer in the foreign equities category, with three stocks epitomizing its approach.
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The Goldman Sachs ActiveBeta Europe Equity ETF (GSEU ) charges a 25 basis point fee for its approach. The fund tracks the Goldman Sachs ActiveBeta Europe Equity index for that cost. The Europe equities ETF applies Goldman Sachs’ multi-factor approach as part of its strategy. In doing so, it looks for stocks with high marks in areas like momentum, quality, and solid value. At the same time, it also looks for lower volatility in its stocks.
Europe Equities ETF GSEU
Together, that approach has helped the Europe equities ETF return 27.59% YTD, per ETF Database data. That outperformed the fund’s FactSet Segment average in that time, with the average at 25.95% YTD. What’s more, that hot streak includes beating that average over the last one month period, as well. Which stocks has the fund invested in, then, that have contributed to those returns?
According to ETF Database, the strategy’s top three sectors include finance, health technology, and consumer non-durables. Markets like the United Kingdom, Germany, and France take the top three positions for the fund’s targeted countries.
As of August 15, the Europe equities ETF’s top three stocks included SAP SE (SAP), ASML Holding NV (ASML), and Novartis AG (NVS). SAP, the German multinational software firm, is up 13.8% YTD and could benefit from AI innovations. ASML, a globally important supplier in the semiconductor area, has provided a 6.7% return YTD, for its own part, also benefiting from that AI megatrend. Finally, NOVN has provided a 12.58% swing for its investors in that time, as well.
Those three firms represent some of the world’s leading firms in which the ETF invests. The strategy’s focus on developed firms outside of the U.S. could help it continue to play a role as a diversifier. Looking ahead, it may be worth considering in that role.
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