There are some positive signs that the Eurozone is starting to return to some sense of normalcy. Retail sales were higher in the Eurozone as consumers were more apt to pull out their wallets and spend, which allowed retail numbers to return to pre-pandemic levels.

“Sales in the 19-country currency bloc rose by 5.7% in June from May, according to Eurostat, the European Union’s statistics office. Spending on clothing and car fuel drove the gains,” a Euractiv article noted. “The increase in sales was smaller than the 5.9% forecast by economists polled by Reuters, but that was largely offset by an upward revision of May sales.”

“Eurostat said on Wednesday the volume of shopping leaped by 20.3% in May for the month, revising its earlier estimate of a 17.8% increase, which was already the steepest increase since eurozone records began in 1999,” the article added.

^MSEUR Chart

^MSEUR data by YCharts

As retail sales continue to rebound, here are a pair of Europe-focused ETFs to watch that feature a hedging approach to mitigate volatility between the euro and U.S. dollar:

  1. Xtrackers MSCI Europe Hedged Equity ETF (DBEU): seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI Europe US Dollar Hedged Index. The fund, using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, of the underlying index, which is designed to track the performance of the developed markets in Europe, while mitigating exposure to fluctuations between the value of the U.S. dollar and the currencies of the countries included in the underlying index. It will invest at least 80% of its total assets in component securities of the underlying index.
  2. Xtrackers MSCI Eurozone Hedged Equity ETF (DBEZ): seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI EMU IMI US Dollar Hedged Index. The fund, using a “passive” or indexing investment approach, seeks investment results that correspond generally to the performance, of the underlying index, which is designed to track the performance of equity securities based in the countries in the European Monetary Union, while seeking to mitigate exposure to fluctuations between the value of the U.S. dollar and the euro. It will invest at least 80% of its total assets in component securities of the underlying index.

For more broad exposure, ETF investors can check out the Vanguard FTSE Europe Index Fund ETF Shares (NYSEArca: VGK), which seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in the major markets of Europe. The fund employs an indexing investment approach by investing all, or substantially all, of its assets in the common stocks included in the FTSE Developed Europe All Cap Index.

For more market trends, visit ETF Trends.