An Unheralded ETF Avenue to Europe
January 8th, 2014 at 9:00am by Tom Lydon
While investors were busy pulling money out of emerging markets exchange traded funds last year, they plunked hundreds of billions into developed market funds. Those allocations were not limited to U.S. and Japanese stock funds, the shining stars of developed world equity markets last year.
Attractive valuations and signs the continent is emerging from one of the worst sovereign debt crises on record lure investors to Europe ETFs, both diversified and single-country funds, as well. There is no shortage of Europe ETFs trading on U.S. exchanges, but last year, investors displayed a preference for more familiar fare at both the multi- and single-country levels with funds with heavy allocations to the U.K., Switzerland and Germany commanding most of the attention – and cash. [Attractive Valuations Found Among Europe ETFs]
It is easy for an unheralded ETF such as the First Trust Europe AlphaDEX Fund (NYSEArca: FEP) to get lost in the shuffle, but fund’s place among the more obscure Europe ETF offerings may not be justified. Importantly, inflows data indicate investors are starting to wake up to FEP’s story.
FEP is not small, at least not anymore. The fund now has $436.5 million in assets under management, $341.1 million of which came into the ETF last year. Investors have not let up. FEP has attracted almost $33 million since the start of 2014.
FEP is a smart beta fund as the ETF’s 202 holdings are selected based “on growth factors including 3-, 6- and 12-month price appreciation, sales to price and one year sales growth, and separately on value factors including book value to price, cash flow to price and return on assets,” according to First Trust. [10 Great Diversified Europe ETFs]