Amid signs some Eurozone economies are slipping into recession, some marquee exchange traded funds tracking European equities have wilted this year.
For example, the iShares MSCI EMU ETF (NYSEArca: EZU) and the Vanguard FTSE Europe ETF (NYSEArca: VGK), which is not a dedicated Eurozone fund, have tumbled an average of 7%. However, weakness in Eurozone stocks has opened the door to what some investors see as a value opportunity, helping some ETFs rapidly add new assets. [Investors are Piling Into the Hedged Europe ETF]
That includes new ETFs such as the First Trust Eurozone AlphaDEX ETF (NasdaqGM: FEUZ). Keeping with the trend of some new First Trust ETFs gathering assets at a prodigious pace soon after coming to market, the First Trust Eurozone AlphaDEX ETF now has over $385 million in assets under management even though it is less than two months old.
The bulk of FEUZ’s $385.2 million in AUM, $343.3 million to be precise, have flowed into the new ETF since the start of September. Only eight ETFs have attracted more new assets this month. In what could be a sign that investors are investors are preparing for a 2015 rebound in for Eurozone stocks, the WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ) is one of the ETFs that has added more new assets than FEUZ this month while EZU is just behind FEUZ, rounding out Decembers top-10 asset-gathering ETFs. [These ETFs Have Doubled in Size]
FEUZ’s underlying index evaluates stocks on “growth factors including 3-, 6- and 12- month price appreciation, sales to price and one year sales growth, and separately on value factors including book value to price, cash flow to price and return on assets. All stocks are ranked on the sum of ranks for the growth factors and, separately, all stocks are ranked on the sum of ranks for the value factors. A stock must have data for all growth and/or value factors to receive a rank for that style,” according to First Trust.
The new ETF allocates over 45% of its combined weight to France and Germany. Italy is the only other country to receive a double-digit allocation in the fund.
Financial services is FEUZ’s largest sector allocation at almost 21%, but the ETF has five other double-digit sector weights ranging from 10.1% to 12.6%. Those are industrials, materials, utilities, health care and consumer discretionary.
First Trust Eurozone AlphaDex Fund
ETF Trends editorial team contributed to this post.