Some investors are making large bets on Europe through leveraged exchange traded funds as the Eurozone moves out of a drawn out recession. However, geopolitical tensions could throw a wrench into the market recovery.

Over the past week, the Barclays ETN+ FI Enhanced Europe 50 ETN (NYSEArca: FEEU), which provides leveraged exposure to 50 European blue chip companies selected from the Stoxx Europe 600 Index, has attracted $486 million in inflows over the past week, according to IndexUniverse data.

The Eurozone is moving out of a recession, with recent data revealing a higher-than-expected 0.3% quarter-over-quarter expansion between April through June, ending six consecutive quarters of contractions, the Economic Times reports.

“Although the region’s growth is finally showing signs of life, the European Central Bank’s pledge to maintain aggressive monetary policy accommodation for the foreseeable future has enabled investors to embrace a bullish stance despite mounting liquidity tapering worries elsewhere,” Alec Young, S&P Capital IQ global equity strategist, said in a research note. [Fundamentals Looking Up For European ETFs]

Nevertheless, bellicose rhetoric in light of chemical agents deployed in the ongoing Syrian civil war has rattled European markets, which suffered their largest daily decline in two months Tuesday and are hovering around a one month low.

FEEU fell 3.2% during mid-day trading Tuesday and the Vanguard FTSE Europe ETF (NYSEArca: VGK) is down 1.7%.

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