In Europe, British and Swiss equities have been solid performers this year, helping VGK and the iShares Europe ETF (NYSEArca: IEV) to year-to-date gains of 20%. However, ETFs that exclude the U.K. and Switzerland in favor of a heavier focus on the Eurozone recently started outperforming their more conservatively positioned counterparts. In the past 90 days, the SPDR EURO STOXX 50 Fund (NYSEArca: FEZ) has outpaced IEV and VGK by over 400 basis points. [Europe ETFs Look to Stay Strong]
With Goldman forecasting an uptick in European corporate margins, investors may want to consider Europe ETFs with decent cyclical exposure. FEZ allocates a combined 29% of its weight to industrial, discretionary and materials names while the WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ), which would benefit if the euro declines, has a combined 39% weight industrial and discretionary names.
iShares Europe ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of DXJ and EFA.