That is not a knock on the ETF. One way of looking at the scenario is that DBU may offer the potential from more upside going forward than its U.S. equivalents. With over 22% of its weight going to Brazil and France, betting on more upside for DBU is not outlandish. The iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) needs to double from current levels to reclaim its all-time high while the iShares MSCI France ETF (NYSEArca: EWQ) would need to gain another 33% to achieve that feat. [Big Upside for the France ETF]
DBU’s all-time high is around $37. The ETF closed just under $21 Thursday.
All told, Eurozone nations account for nearly a third of DBU’s weight and that does not include the fund’s exposure to the U.K. or Emerging Europe, indicating the ETF has some leverage to recovering economies throughout Europe. [Global Utilities ETF Sturdy as U.S. Rivals Slide]
DBU offers another advantage: Because it is an international fund, it is less sensitive to changes in U.S. interest rates than domestic utilities ETF. Additionally, the fund has stood strong this year even as some of its constituent countries have raised rates. For example, Brazil has some of the highest rates in the emerging world while the same can be said of New Zealand among developed markets. Higher rates, and soon, appear to be a foregone conclusion in the U.K. Those three countries combine for about 22% of DBU’s weight, but the ETF is still up 16.4% this year.
WisdomTree Global ex-US Utilities Fund Top-10 Holdings