This has been a good year for Europe ETFs. Mounting signs of economic recovery in the U.K. and Eurozone coupled with increasingly accommodative monetary policy from the European Central Bank have bolstered the fortunes of a wide range of Europe ETFs.
Two Europe ETFs – the Vanguard FTSE Europe ETF (NYSEArca: VGK) and the iShares MSCI EMU ETF (NYSEArca: EZU) – are found among the top-10 asset gathering ETFs for the year. Others have proven comparably adept at garnering inflows.
Earlier this year, the WisdomTree Europe SmallCap Dividend Fund (NYSEArca: DFE) and the WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ) crossed the $1 billion in assets under management mark. DFE and HEDJ have since grown 73% and almost 82%, respectively. [Popular ETFs Ahead of ECB Meeting]
All that is to say this is not a bad time to roll out a new Europe ETF, such as the iShares Core MSCI Europe ETF (NYSEArca: IEUR). IEUR debuted last week as part of the expansion of the iShares core suite of ETFs.
Advisors and investors evaluating IEUR will undoubtedly notice the new ETF’s 0.12% expense ratio, which puts the new ETF squarely in competition with VGK. Of course, big institutions like saving money on fees as well. IEUR’s annual fee is just 10% of the average, comparable, actively managed mutual fund.
When the iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG) debuted in late 2012, conventional wisdom said that ETF was geared towards cost-conscious retail investors. In reality, institutional investors have been big drivers IEMG’s growth to over $4.7 billion in assets. [Core ETFs Popular Among Institutions]
A similar scenario could be seen in the future with IEUR as iShares clients of all stripes look for a lower fee answer to the iShares Europe ETF (NYSEArca: IEV). The $3.7 billion IEV charges 0.6% per year.