It’s hard to believe that one year later here in August of 2012 after last year’s dreadful showing, that we would be talking about “Financials” stocks, let alone European based financials.

Ironically, August is traditionally known as a holiday month for most European employees, and thus far based on equity returns, the holiday has been generous to investors.

The iShares MSCI Europe Financials Sector (NasdaqGM: EUFN) is an under-recognized ETF, only trading about 30,000 shares per day but it provides a nice reflection of major European financial companies as well as a picture of their health.

Currently, top holdings of EUFN are HSBC Holdings PLC – 14.06%, Standard Chartered PLC – 4.82%, Banco Santander SA – 4.69%, Allianz SE – 4.13%, and UBS AG – 4.12%. The ETF, despite rallying more than 2% yesterday, still has some ground to make up relative to its U.S. based financial peers.

SPDR Financials (NYSEArca: XLF), for instance, has risen 16% YTD versus EUFN’s gain of 6.40%. However, EUFN rose above its 200 day moving average earlier this week and appears to have legs at these levels, challenging its highest price levels since this past April.