“Consumer confidence is at its highest level post-financial crisis, while the Markit Eurozone Manufacturing Index is near a three-year high,” according to State Street. “Improving economic prospects and reduced political risk have also compressed bond spreads of France, Italy and Spain over Germany.”

On Demand Webcast: Where ETF Investors Should Look Outside the U.S.

FEZ allocates 68% of its combined weight to French and German stocks. Financial services, one of the hottest sectors in Europe this year, are over 23% of the FEZ roster while industrial and consumer discretionary names combine for a quarter of the ETF’s weight.

“Eurozone equities are trading around a 15-year average—compared with 15-year highs for their US counterparts, based on price-to-book ratio, presenting investors a value opportunity,” notes State Street.

With the bull market in U.S. stocks aging and investors increasingly feeling stocks here are richly valued, some are turning to Europe and the related exchange traded funds in search of bargains. FEZ shows a 14.2 P/E and a 1.5 P/B, whereas the S&P 500 Index is hovering around a 18.7 P/E and a 2.7 P/B.

For more information on the European markets, visit our Europe category.