That factoid is meaningful because FEZ has outpaced VGK by 330 basis points over the past 90 days. FEZ is not cheaper in terms of fees (0.29%), but it is cheaper on valuation. It has a P/E ratio of 13.7 compared to 19.1 for VGK. h
Part of the reason for the lower valuation is that FEZ is not excessively allocated to expensive defensive sectors. Staples, telecom and utilities combine for less than 22% of the fund’s weight. [Playing Defense Isn’t Cheap]
Neither FEZ nor VGK offers a euro hedge, so investors looking to hedge their currency exposure can complement positions in FEZ or VGK with an such as the WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ).
Not only does HEDJ feature the currency hedge component, but it is Eurozone-centric with 99.28% of its weight going to Eurozone member states. Do not underestimate HEDJ’s 17.4% weight to the Netherlands, far higher than what is found in FEZ or VGJ. Dutch stocks have been among Europe’s best performers this year. [Buyers go Dutch With This ETF]
Vanguard FTSE Europe ETF
ETF Trends editorial team contributed to this post.