Consequently, given the risks associated with United Kingdom exposure, ETF investors looking into Europe market exposure should carefully consider their investment options. Europe ETF investors should look to region-specific options that specifically target Eurozone member states as opposed to more broader reaching Europe ETFs that may include United Kingdom exposure.
For example, the Vanguard FTSE Europe ETF (NYSEArca: VGK) is the largest and most popular play on European markets. However, VGK takes a broader approach to Europe exposure and includes U.K. and Switzerland company stocks. The United Kingdom is the largest country weight in the portfolio, making up 28.5% of VGK’s underlying weight.
On the other hand, investors may consider more Eurozone-centric ETF picks, such as the iShares MSCI EMU ETF (NYSEArca: EZU), which focuses on Eurozone members or does not include the likes of United Kingdom and Switzerland exposure.
For more information on the European markets, visit our Europe category.