After a stand out year, U.S. equities could begin to slow. Consequently, investors could turn to overseas European markets and related exchange traded funds for better returns.
Peter Oppenheimer, the chief global equities strategist at Goldman Sachs, argues that U.S. gains are coming at a slower rate than European counterparts, reports Matt Clinch for CNBC.
“(European) economic activity has been weak, there were a lot of concerns last year…but as (quantitative easing) started to come through, those fears are fading a little bit and that’s what’s buoying the European market,” Oppenheimer said on CNBC.
For instance, the SPDR S&P 500 ETF (NYSEArca: SPY) gained 2.2% year-to-date, whereas the iShares MSCI EMU ETF (NYSEArca: EZU) and SPDR EURO STOXX 50 (NYSEArca: FEZ), which both focus on Eurozone markets, rose 5.5% and 4.7%, respectively.
Additionally, Oppenheimer warned that the euro could fall to parity with the U.S. dollar, or even further, which would help stimulate the Eurozone economy and bolster earnings for the region’s exporters.
The CurrencyShares Euro Currency Trust (NYSEArca: FXE) has declined 5.7% year-to-date. The euro currency is now trading at about $1.1396, compared to about $1.2 at the start of the year.