Applying Factors To Developed Market Stocks

Even with the recent rally in European equities, valuations still look attractive relative to domestic stocks. On a forward earnings basis, European stocks have gotten cheaper continually since 2015, and price-to-book value for the region shows European names trading at a multi-year discount to the U.S.

Additionally, DEEF devotes over 29% of its weight to Japan, one of the most undervalued major developed markets.

At the sector level, DEEF is highly cyclical as the ETF allocates about 63% of its combined weight to industrial, consumer discretionary, materials and financial services stocks. DEEF jumped 4% last week.

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