Looking at broad Europe ETFs, investors are still exposed to some of the more volatile states, namely Spain and Italy. EZU has a 11.5% weight toward Spain and 7.8% in Italy. FEZ allocations include Spain 13.2% and Italy 8.1%. HEDJ weights Spain 19.9% and Italy 2.1%. The broad Europe ETFs generally hold 50% or more over their weight in Germany and France, the two largest economies in the union.
With ETFs, investors can also pick and choose their exposure. For instance, investors can also find ETF options for the more stable developed Eurozone economies, including iShares MSCI Germany ETF (NYSEArca: EWG), iShares MSCI France ETF (NYSEArca: EWQ), iShares MSCI Belgium Capped ETF (NYSEArca: EWK), iShares MSCI Finland Capped ETF (NYSEArca: EFNL) and iShares MSCI Austria Capped ETF (NYSEArca: EWO). While still lower due to their Eurozone association with Portugal, the northern Europe country-specific ETFs are revealing less volatility in the current risk-off environment.
For more information on the Eurozone, visit our Europe category.
Max Chen contributed to this article. Tom Lydon’s clients own shares of HEDJ.