With yields at record lows, many investors are looking at all parts around the globe for yield. One of the areas of opportunity could be in European debt, which investors are already snatching up quickly.
“Investors are lapping up a record amount of Southern European sovereign debt in a hunt for yield, while counting on the region’s central bank to backstop the riskiest bonds,” a Wall Street Journal article noted. “Italy raised €16 billion ($17.3 billion) in late April in its largest-ever syndicated deal, through the sale of both five-year and 30-year bonds. A day later, Spain set a record selling €15 billion of 10-year debt.”
In the meantime, here are a few Europe-focused ETFs to watch as the drama unfolds:
- Xtrackers Eurozone Equity ETF (EURZ): seeks investment results that correspond generally to the performance, before fees and expenses, of the NASDAQ Eurozone Large Mid Cap Index (the “underlying index”). The fund will invest at least 80% of its total assets (but typically far more) in component securities (including depositary receipts in respect of such securities) of the underlying index. The underlying index is designed to track the performance of equity securities of large- and mid-capitalization companies based in the countries in the Economic and Monetary Union (the “EMU” or “Eurozone”) of the European Union (“EU”).
- 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.
- 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.
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