Touring Big-Cap Europe

Want to add some foreign exposure to your portfolio? How about big-cap Europe? Want to reduce volatility and add some yield to your portfolio? How about big-cap Europe? Want exciting growth? Well, you may need to look elsewhere, but this part of the market has utility in the context of a diversified portfolio.

There are a lot of ETFs now that invest in big-cap Europe. These funds, even the older ones, don't get much attention, probably because so many investors don't bother to look beyond the iShares MSCI EAFE Index Fund (EFA Quote) for foreign exposure.

As you can see (on the chart below) and would expect, all of these funds correlate closely for a short-time period, but there are some structural differences that could matter longer term. The two biggest similarities of all these funds is that they are heavily invested in the financial sector and all have the largest country weight in the U.K.

The BLDRs Europe 100 ADR Index Fund (ADRU Quote) is a remarkably small fund, for being four years old, with only $35 million in assets. It owns the 100 stocks that make up the Bank of New York Europe 100 ADR Index. It would be easy to read through that name without noticing something I think is important, which is that it owns only ADRs. ...