Some investors are growing increasingly wary of European banks as ETFs tracking financials saw net outflows in Europe and the U.S. Goldman sachs research found mutual funds were on average holding fewer bank shares than benchmark indices and even raised short positions on the sector year-over-year. However, some market observers believe opportunities remain with European stocks.
European stocks sport compelling value relative to major U.S. equity benchmark. European cyclical stocks are attractively against U.S. equivalents, which is a positive for DBEZ.
DBEZ allocates about a third of its weight to financial services and industrial stocks. The consumer discretionary and technology sectors combine for 23% of the fund’s weight.
For more information on the currency hedging strategy, visit our currency-hedged ETFs category.