DBEU is a currency hedged ETF, but as Kittsley noted to IBD, the ETF is a diversified play on Europe as it holds nearly 440 stocks across 16 countries.
That means the ETF is not explicit Eurozone play. Not with the U.K. and Switzerlan combining for 42.5% of the fund’s weight. However, France, Germany, the Netherlands, Spain and Italy combine for almost 45% of DBEU’s weight, giving the fund significant exposure to a weaker euro and perhaps enough to ward off the effects of a stronger British pound. [Falling Euro Pushes Dollars Into These ETFs]
The hedge euro exposure is a benefit at a time when traders are building bearish bets against the common currency. “The difference in the number of wagers on a decline in the euro compared with those on a rally — net shorts — totaled 88,823 contracts on July 22, the most since November 2012,” Bloomberg reported, citing Commodities Futures Trading Commission data.
DBEU also devotes 4.5% of its weight to Sweden, a country that recently lowered interest rates. In July, the CurrencyShares Swedish Krona Trust (NYSEArca: FXS) fell almost 3%.
db X-Trackers MSCI Europe Hedged Equity Fund
