Top 10 Eurozone ETFs

 

Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive. The result is a more manageable list of issues from which to view and make selections.

There are only 11 current members in the EU (European Union) with only 9 ETFs as single country funds. Not in the union currently are England, Switzerland, Russia and Poland for example and it remains to be seen if they should join. These country ETFs will be maintained in a separate list. Sweden is a country that has elected to opt-out for now as a full member not having joined using the euro currency. Greece and Portugal as of this date do not have a U.S. listed ETF available but we should expect their appearance at some point.

Below is our methodology for ranking the ETFs within the category.

Strong established linked index
Excellent consistent performance and index tracking
Low fee structure
Strong portfolio suitability
Excellent liquidity

Established linked index even if "enhanced"
Good performance or more volatile if "enhanced" index
Average to higher fee structure
Good portfolio suitability or more active management if "enhanced" index
Decent liquidity

Enhanced or seasoned index
Less consistent performance and more volatile
Fees higher than average
Portfolio suitability would need more active trading
Average to below average liquidity

Index is new
Issue is new and needs seasoning
Fees are high
Portfolio suitability also needs seasoning
Liquidity below average

All issues in this list are from iShares which was the original issuer of single country fund ETFs and remains the leader in this particularly as it applies to the EU.

We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Premium members to the ETF Digest receive added signals when markets become extended such as DeMark triggers to exit overbought/oversold conditions.

For traders and investors wishing to hedge, leveraged and inverse issues are available to utilize from ProShares and Direxion and where available these are noted.

#1: iShares EMU ETF (EZU)

EZU (iShares EMU ETF) follows the MSCI EMU Index which contains and measures the performance of those countries with membership in the European Union. Using this catch-all ETF as the first on the list gives us a broad overview of the sector. The fund was launched in July 2000. The expense ratio is .54%. AUM (Assets under Management) equal $700 million (down 40% since July 2011) and average daily trading volume is 456K shares. As of mid-November 2011 the annual dividend yield was 3.98% and YTD return -12.70%.

EZU Top Ten Holdings & Weightings

Data as of November 2011

1. Total SA (FP): 3.68%
2. Telefonica SA (TEF): 3.10%
3. Siemens AG (SIE): 2.93%
4. Sanofi (SAN): 2.87%
5. Banco Santander SA (SAN): 2.74%
6. Basf SE (BFFAF): 2.21%
7. Unilever NV (UNA): 2.01%
8. Sap AG (SAP): 1.84%
9. Bayer AG (BAYN): 1.79%
10. Allianz SE (ALIZF): 1.67%

 

#2: iShares MSCI Germany Index Fund (EWG),

EWG (iShares German ETF) follows the MSCI Germany Index and nothing really needs to be said beyond this. The fund was launched in March 1996. The expense ratio is .53%. AUM equal $2.7 billion (down 30% from July 2011) and average daily trading volume is nearly 6M shares. As of mid November 2011 the annual dividend yield was 3.37% and YTD of -10.35%.

EWG Top Ten Holdings & Weightings

Data as of November 2011

1. Siemens AG (SIE): 10.50%
2. Basf SE (BFFAF): 7.93%
3. Sap AG (SAP): 6.60%
4. Bayer AG (BAYN): 6.42%
5. Allianz SE (ALIZF): 6.03%
6. Daimler AG (DDAIF): 5.71%
7. E.ON Aktiengesellschaft (EOAN): 5.52%
8. Deutsche Telekom AG (DTE): 4.65%
9. Deutsche Bank AG (DB): 4.59%
10. Muenchener Rueckversicherungs AG (MUV2): 3.30%

 

#3 iShares MSCI France Index Fund (EWQ)

 

EWQ (iShares France ETF) follows the MSCI France Index. The fund was launched in March 1996. The expense ratio is .54%. AUM equal $309 million and average daily trading volume is 470K shares. As of mid-November 2011 the annual dividend yield was 3.30% and YTD return -13.17%.

EWQ Top Ten Holdings & Weightings

Data as of November 2011

1. Total SA (FP): 11.27%
2. Sanofi (SAN): 8.79%
3. BNP Paribas (BNP): 4.61%
4. GDF Suez (GSZ): 4.43%
5. Danone (BN): 4.32%
6. LVMH Moet Hennessy Louis Vuitton SA (MC): 4.03%
7. Air Liquide (AI): 3.98%
8. France Telecom SA (FTE): 3.64%
9. Schneider Electric (SU): 3.17%
10. Vivendi SA (VIVEF): 3.04%

 

#4: iShares MSCI Sweden Index Fund (EWD)

 

EWD (iShares Sweden ETF) follows the MSCI Sweden Index. The fund was launched in March 1996. The expense ratio is .53%. AUM equal $279 million and average daily trading volume is 280K shares. As of late mid-November 2011 the annual dividend yield was 4.20% and YTD return was -14.00%.

EWD Top Ten Holdings & Weightings

Data as of November 2011

1. Hennes & Mauritz AB (HM B): 11.64%
2. Ericsson Telephone Company (ERIC B): 11.06%
3. Nordea Bank AB (NDA SEK): 8.14%
4. TeliaSonera AB (TLSN): 5.44%
5. Volvo Corporation (VOLVF): 5.19%
6. Svenska Handelsbanken (SHB A): 4.75%
7. Atlas Copco (ATCO A): 4.55%
8. Sandvik AB (SDVKF): 4.44%
9. Swedbank AB (SWED A): 3.42%
10. Investor AB (INVE B): 3.06%

#5: MSCI Netherlands Investable Market Index Fund (EWN)

EWN (iShares Netherlands ETF) follows the MSCI Netherlands Investable Market Index. The fund was launched in March 1996. The expense ratio is .53%. AUM equal $87 million and averaged daily trading volume is 132K shares. As of mid-November 2011 the annual dividend yield was 2.73% and YTD return was -13.50%.

EWN Top Ten Holdings & Weightings

Data as of November 2011

1. Unilever NV (UNA): 20.76%
2. ING Groep N.V. (INGA): 10.95%
3. Koninklijke (Royal) KPN NV (KPN): 8.35%
4. Koninklijke Philips Electronics NV (PHIA): 7.18%
5. Koninklijke Ahold NV (AH): 5.41%
6. ASML Holding NV (ASMLF): 5.25%
7. Heineken N.V. (HEIA): 4.70%
8. Akzo Nobel NV (AKZOF): 4.20%
9. Reed Elsevier NV (REN): 3.09%
10. Aegon NV (AEGOF): 2.86%

#6: iShares MSCI Italy Index Fund (EWI)

EWI (iShares Italy ETF) follows the MSCI Italy Index. The fund was launched in March 1996. The expense ratio is .54%. AUM equal $ 98 million (down by 40% since July) and average daily trading volume is over 500K shares. As of mid-November 2011 the dividend yield was 3.88% and YTD return was -17.32%.

EWI Top Ten Holdings & Weightings

Data as of November 2011

1. Eni SpA (ENI): 19.92%
2. ENEL Ente Nazionale per L'Energ Elet SPA (ENEL): 13.91%
3. Intesa Sanpaolo SpA (ISP): 7.58%
4. UniCredit SpA (UNCFF): 6.89%
5. Generali Assicurazioni (G): 4.86%
6. Saipem (SPM): 4.38%
7. Snam Rete Gas (SRG): 4.14%
8. Telecom Italia SpA (TIT): 3.46%
9. Fiat Industrial SpA (FI): 2.83%
10. Tenaris SA (TEN): 2.78%

#7: iShares MSCI Spain Index Fund (EWP)

EWP (iShares Spain ETF) follow the MSCI Spain Index. The fund was launched in March 1996. The expense ratio is .54%. AUM equal $131 million and average daily trading volume is 225K shares. As of mid-November 2011 the annual dividend yield was 5.90% and YTD return was -6.50%.

EWP Top Ten Holdings & Weightings

Data as of November 2011

1. Telefonica SA (TEF): 20.10%
2. Banco Santander SA (SAN): 19.58%
3. Banco Bilbao Vizcaya Argentaria SA (BBVA): 8.48%
4. Repsol YPF SA (REPYF): 4.89%
5. Iberdrola SA (IBE): 4.84%
6. Industria de Diseño Textil,S.A."inditex" (ITX): 4.61%
7. Abertis Infraestructuras SA (ABE): 2.92%
8. Gas Natural Sdg, S.A. (GAS): 2.86%
9. ACS Actividades de Construccion y Servicios SA (ACS): 2.62%
10. Banco Popular Espanol (POP): 2.61%

#8: iShares MSCI Austria Investable Market Index Fund (EWO)

EWO (iShares Austria ETF) follows the MSCI Austria Investable Index. The fund was launched in March 1996. AUM equal $70 million (down 50% since July 2011) and average daily trading volume is 143K shares. As of mid-November 2011 the annual dividend yield was 3.10% and YTD return -29.10%. It should be noted that Austria serves as one of the major financial centers for Eastern Europe.

EWO Top Ten Holdings & Weightings

Data as of November 2011

1. Erste Bank der oesterreichischen Sparkassen AG (EBS): 12.35%
2. Omv AG (OMVJF): 11.60%
3. Voest-Alpine AG (VOE): 8.23%
4. Telekom Austria AG (TKA): 8.06%
5. Immofinanz Immobilien Anlagen AG (IIA): 6.60%
6. Andritz AG (ANDR): 5.27%
7. Verbund AG (VER): 4.49%
8. Vienna Insurance Group: 4.42%
9. Raiffeisen Bank International AG (RBI): 4.16%
10. Wienerberger Baustoffindustrie AG (WIE): 3.92%

#9: iShares MSCI Belgium Investable Market Index Fund (EWK)

EWK (iShares Belgium ETF) follows the MSCI Investable Belgium Market Index. The fund was launched in March 1996. The expense ratio is .54%. AUM equal $24 million (down nearly by half since July 2011) with average daily trading volume of 61K shares. As of mid-November 2011 the annual dividend yield was 3.00% and YTD return -10.45%. By fall of 2011 many banks in the financial sector were under heavy ECB pressure to shore up their balance sheets due to debt exposure from PIGS.

EWK Top Ten Holdings & Weightings

Data as of November 2011

1. Anheuser-Busch InBev SA (AHBIF): 26.38%
2. Delhaize Group SA (DELB): 6.40%
3. Groupe Bruxelles Lambert (GBLB): 6.19%
4. Solvay SA (SOLB): 5.89%
5. Belgacom SA (BELG): 5.15%
6. UCB SA (UCB): 4.77%
7. Colruyt Sa (COLR): 4.20%
8. Umicore (UMI): 4.11%
9. Ageas NV (AGS): 3.69%
10. KBC Group SA/NV (KBC): 3.51%

#10: iShares MSCI Ireland Capped Investable Market Index Fund (EIRL)

EIRL (iShares Ireland ETF) follows the MSCI Ireland Investable Market 25/50 Index. The fund was launched in May 2010. The expense ratio is .53%. AUM equal $7.5 million which is attributable to its more recent launch and current uncertainties. Average daily trading volume is 9K shares. As of late July 2011 the annual dividend yield was 3.80% and YTD return of -3.10%.

EIRL Top Ten Holdings & Weightings

Data as of November 2011

1. CRH Plc (CRH): 22.04%
2. Elan Corp PLC (DRX): 12.14%
3. Kerry Group PLC (KRZ): 11.45%
4. Paddy Power PLC (PLS): 5.05%
5. Ryanair Holdings PLC ADR (RYAAY): 4.61%
6. Dcc PLC (DCC): 4.60%
7. Kingspan Group PLC (KRX): 4.47%
8. C&C Group (GCC): 4.08%
9. Bank of Ireland (Governor & Company of) (BIR): 3.90%
10. Smurfit Kappa Group PLC (SK3): 3.76%

The eurozone and EMU (European Monetary Union) is a cauldron of episodic controversy these days. One day things look better and the next the entire EU and EMU appears as it will collapse. It's my belief these issues will continue for a long time. Therefore, investors are advised to follow the monthly 12 period moving average as noted above until a real fix is in place. When prices finally rise above the 12 period moving averages it should act as confirmation for you.  

iShares dominates the list having been first to the single country ETFs many years ago. At some point, it should be expected that lower cost sponsors will attempt to enter the fray whether it be Focus Shares, Schwab or Vanguard to name a few. . 

As stated with other sectors, remember ETF sponsors must issue and their interests aren't necessarily aligned with yours. They have a business interest and wish to have a competitive presence in any popular sector.

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The ETF Digest is long EWG in a Lazy Portfolio.

 

(Source for data is from ETF sponsors and various ETF data providers)

 

 

 

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.