Top 10 European Regional ETFs
NEW YORK (
) --
It goes without saying that debt troubles in the eurozone have caused sharp declines in equities from the region and a similar loss of AUM (Assets under Management). The problems here may take a long time to resolve and may remain a drag on global investing.
During 2011 we've seen a great deal of stress in European markets overall due to ongoing debt issues associated with PIIGS (Portugal, Ireland, Italy, Greece and Spain). The European Union (EU), European Central Bank (ECB) and important leaders from Germany and France have tried a variety of measures to guarantee the solvency of these countries. But, most measures have seemed temporary at best only to be revisited with more remedies. Clearly the powers that be wish to keep the euro zone and euro currency together and financially sound.
As 2012 has evolved hopes are high that global central banks and the ECB (European Central Bank) will arrange for a rescue of Greece and other countries mired in debt. Currently the focus is on Greece but contagion issues are always at the forefront if Greek debt agreements aren't reached. Italy and/or Spain would be the next dominoes to fall and present larger problems.
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 is currently an expanding list of 30 ETFs oriented to the European region whether in single country funds or with regional issues. The following analysis features a fair representation of ETFs available. We believe from these investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize.
ETFs are based on indexes tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones and so forth.
Where competitive issues exist and/or repetitive issues available at a fee cost saving we mention those as other choices. New issues are coming to market consistently (especially globally) and sometimes these issues will need to become more seasoned before they may be included at least in our listings.
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.
#10:
DJ STOXX Select Dividend 30 ETF (FDD)
FDD
follows the Dow Jones STOXX Select Dividend 30 Index which selects the highest dividend paying stocks from the STOXX 600 Index. The fund was launched in August 2007. The expense ratio is .60%. AUM (Assets under Management) equal $10 million and average daily trading volume is only 8K shares. As of late February the annual dividend yield was 5.60% and YTD return 2.78%. The one year return was -12.70%.
A note of caution: since the fund has been in existence since 2007 and hasn't garnered many assets you might wonder if the fund will be successful as it is without being rolled into another fund. I have no basis to know if this would happen but it's something to consider.
Data as of First Quarter 2012
FDD Top Ten Holdings & Weightings
Catlin Group Ltd (CGL): 5.51%
GlaxoSmithKline PLC (GLAXF): 5.26%
Provident Financial PLC (PFG): 5.05%
Sse Plc: 4.90%
United Utilities Group PLC (UU.): 4.61%
Zurich Financial Services AG (ZFSVF): 4.21%
Belgacom SA (BELG): 4.10%
AstraZeneca PLC (AZN): 4.08%
France Telecom SA (FTE): 3.95%
RSA Insurance Group PLC (RSA): 3.85%
#9:
PowerShares
BLDRS Europe 100 ADR ETF (ADRU)
ADRU
follows the Bank of New York Mellon Europe 100 ADR Index which contains 100 European depository receipts. The fund was launched in November 2002. The expense ratio is .30%. AUM equal $16 million and average daily trading volume is less than 4K shares.
(This data challenges the survivability of ADRU as a profitable business enterprise for the sponsor.) As of late February 2012 the annual dividend yield was 3.89% and YTD return 6.44%. The one year return was -6.80%.
Data as of First Quarter 2012
ADRU Top Ten Holdings & Weightings
Novartis AG ADR (NVS): 5.37%
Vodafone Group PLC ADR (VOD): 5.05%
HSBC Holdings PLC ADR (HBC): 4.88%
BP PLC ADR (BP): 4.80%
Royal Dutch Shell PLC ADR (RDS.A): 4.75%
GlaxoSmithKline PLC ADR (GSK): 4.18%
Total SA ADR (TOT): 4.08%
Royal Dutch Shell PLC ADR (RDS.B): 3.65%
British American Tobacco PLC ADR (BTI): 3.36%
Sanofi ADR (SNY): 2.97%
#8:
Nordic 30 ETF (GXF)
GXF
follows the FTSE Nordic 30 Index which includes the 30 largest companies in Sweden, Denmark, Norway and Finland. The Fund was launched in August 2009 with commission free trading at Interactive Brokers. The expense ratio is .50%.
AUM equal $25 million and average daily trading volume is 19K shares. As of late February 2012 the annual dividend yield was 3.13% and YTD return 13.68%. The one year return was -10.16%.
Data as of First Quarter 2012
GXF Top Ten Holdings & Weightings
Novo Nordisk A/S ADR (NVO): 11.46%
Statoil ASA ADR (STO): 7.04%
Ericsson Telephone Company ADR (ERIC): 6.02%
Nordea Bank AB (NDA SEK): 5.50%
Hennes & Mauritz AB (HM B): 4.15%
Volvo Corporation (VOLVF): 4.12%
Svenska Handelsbanken (SHB A): 4.01%
Nokia Oyj ADR (NOK): 3.98%
Sandvik AB (SDVKF): 3.76%
Atlas Copco AB (ATCO A): 3.34%
#7:
S&P Emerging Europe ETF (GUR)
GUR
follows the S&P European Emerging BMI Capped Index. The fund was launched in March 2007. The expense ratio is .59%. AUM equal $99 million and average daily trading volume is 27K shares. As of late February 2012 the annual dividend yield was 3.26% and YTD return 21.20%. The one year return was -11.41%.
Commission free trading is available at TD Ameritrade.
Note: The high weighting in Russia can be a positive or negative depending on your view and market behavior.
Data as of First Quarter 2012
GUR Top Ten Holdings & Weightings
Gazprom O A O 144A: 16.47%
Lukoil Company ADR (LUKOY): 7.19%
Sberbank of Russia OJSC: 7.09%
Oao Novatek GDR (NVTK): 4.04%
Mining And Metallurgical Company Norilsk Nickel JSC, Taimirsky Re (NILSY): 3.93%
Surgutneftegaz OJSC ADR (SGTZY): 3.25%
Rosneftegaz Ojsc 144A: 3.19%
Turkiye Garanti Bankasi A.S. (GARAN): 2.62%
Cez A.S., Praha: 2.41%
Mobile Telesystems OJSC ADR (MBT): 1.89%
#6:
Europe Small-Cap Dividend ETF (DFE)
DFE follows the WisdomTree Europe SmallCap Dividend Index which measures the performance of small cap dividend capitalization segment of the European dividend market and comprises the bottom 25% of stocks in the universe once the top 300 largest companies are removed. The fund was launched in June 2006.
The expense ratio is .58%. AUM equal $26 million and average daily trading volume is 6K shares. As of late February 2012 the annual dividend yield was 5.82% and YTD return 14.73%. The one year return was -10.17%.
Data as of First Quarter 2012
DFE Top Ten Holdings & Weightings
NCC AB (NCC B): 1.39%
Cofinimmo (COFB): 1.38%
Antena 3 de Television, S.A. (A3TV): 1.31%
De La Rue PLC (DLAR): 1.13%
Close Brothers Group PLC (CBG): 1.06%
comdirect bank AG (COM): 0.96%
Greene King PLC (GNK): 0.94%
Fabege AB (FABG): 0.87%
Banca Generali (BGN): 0.86%
Svenska Cellulosa AB (SCA A): 0.81%
#5:
DJ STOXX 50 ETF (FEU)
FEU
follows the Dow Jones STOXX 600 Total Market Index which covers approximately 95% of the investable universe in Europe. The fund was launched in October 2002. The expense ratio is .29%.
AUM equal $30 million and average daily trading volume is 8K shares. As of late February 2012 the annual dividend yield was 4.57% and YTD return 6.34%. The one year return was -8.23%.
Data as of First Quarter 2012
FEU Top Ten Holdings & Weightings
Nestle SA (NESN): 5.69%
HSBC Holdings PLC (HBCYF): 4.47%
Novartis AG (NVSEF): 4.25%
BP Plc (BP.): 4.19%
Vodafone Group PLC (VODPF): 4.12%
Royal Dutch Shell PLC (RDSA): 3.88%
Roche Holding AG (RHHVF): 3.58%
Total SA (FP): 3.53%
GlaxoSmithKline PLC (GLAXF): 3.42%
British American Tobacco PLC (BATS): 2.80%
#4:
DJ Euro STOXX 50 ETF (FEZ)
FEZ
follows the Dow Jones EURO STOXX 50 Index which includes 60% of the market capitalization of the Dow Joes EURO STOXX Total Market Index. The fund was launched in October 2002. The expense ratio is .29%. AUM equal $270 million and average daily trading volume around 185K shares. As of late February 2012 the annual dividend yield was 4.96% and YTD return 8.71%. The one year return was -16.51%.
Commission free trading is available at TD Ameritrade.
Note: FEU and FEZ seem the same and your eyes aren't playing tricks on you. It's an example of ETF sponsors covering all the bases so as to preempt competitors to the space. There are subtle differences in country weightings (France vs the UK for instance.)
Data as of First Quarter 2012
FEZ Top Ten Holdings & Weightings
Total SA (FP): 6.38%
Sanofi (SAN): 4.94%
Siemens AG (SIE): 4.43%
Basf SE (BFFAF): 3.84%
Telefonica SA (TEF): 3.77%
Banco Santander SA (SAN): 3.56%
Eni SpA (ENI): 3.18%
Bayer AG (BAYN): 3.15%
Sap AG (SAP): 3.04%
Unilever NV (UNA): 2.81%
#3:
EMU ETF (EZU)
EZU follows the MSCI EMU Index which incorporates those countries within the European Monetary Union (EMU). The fund was launched in July 2000. The expense ratio is .54%. AUM equal $709 million and average daily trading volume is 344K shares.
As of late February 2012 the annual dividend yield was 3.92% and YTD return 10.11%. The one year return was -16.41%.
Data as of First Quarter 2012
EZU Top Ten Holdings & Weightings
Total SA (FP): 3.94%
Siemens AG (SIE): 3.00%
Sanofi (SAN): 2.95%
Telefonica SA (TEF): 2.56%
Basf SE (BFFAF): 2.52%
Banco Santander SA (SAN): 2.35%
Bayer AG (BAYN): 2.05%
Eni SpA (ENI): 1.93%
Unilever NV (UNA): 1.92%
Sap AG ADR (SAP): 1.89%
#2:
Europe 350 ETF (IEV)
IEV
follows the S&P Europe 350 index which measures the largest 350 companies in Europe and the UK. The fund was launched in July 2000. The expense ratio is .60%. AUM equal $1 billion and average daily trading volume is 339K shares. As of late February 2012 the annual dividend yield was 3.43% and YTD return 8.62%. The one year return was -9.36%.
Direxion Shares and ProShares offer inverse and leveraged long/short ETFs for those wishing to hedge or speculate here.
Data as of First Quarter 2012
IEV Top Ten Holdings & Weightings
Nestle SA (NESN): 3.10%
Novartis AG (NVSEF): 2.42%
HSBC Holdings PLC (HBCYF): 2.38%
BP Plc (BP.): 2.21%
Vodafone Group PLC (VODPF): 2.19%
Royal Dutch Shell PLC (RDSA): 2.06%
Total SA (FP): 1.99%
Roche Holding AG (RHHVF): 1.93%
GlaxoSmithKline PLC (GLAXF): 1.83%
Royal Dutch Shell PLC B (RDSB): 1.55%
#1:
Europe ETF (VGK)
VGK
follows the MSCI Europe Index which includes the largest weightings from 16 different European countries. The fund was launched in March 2005. The expense ratio is .14% and features commission free trading at Ameritrade and Vanguard. AUM equal $2.6 billion and average daily trading volume is 207K shares. As of late February 2012 the annual dividend yield was 4.39% and YTD return 8.52%. The one year return was -8.88%.
Direxion Shares and ProShares offer inverse and leveraged long/short ETFs for those wishing to hedge or speculate here.
Commission free trading is available at TD Ameritrade and Vanguard.
Data as of First Quarter 2012
VGK Top Ten Holdings & Weightings
Nestle SA (NESN): 3.28%
HSBC Holdings PLC (HBCYF): 2.35%
Novartis AG (NVSEF): 2.24%
Vodafone Group PLC (VODPF): 2.18%
Roche Holding AG (RHHVF): 1.95%
BP Plc (BP.): 1.87%
GlaxoSmithKline PLC (GLAXF): 1.83%
Total SA (FP): 1.61%
Royal Dutch Shell PLC B (RDSB): 1.44%
British American Tobacco PLC (BATS): 1.44%
Our star ranking system is just one way to select the best ETFs in the category. The methodology with these rankings is below.
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
There is a lot to choose from in terms of indexes linked to ETFs. Some are passive and duplicative relatively. It's essential to remember it remains a game of battleship for sponsors seeking to be first to a sector space or just being competitive in the space.
New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned.
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.
For further information about portfolio structures using technical indicators like DeMark and other indicators, take a free 14-day trial at
ETF Digest
. Follow us on
and
as well and join our group conversations.
You may address any feedback to:
The ETF Digest has no current positions in the featured ETFs.
(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
, 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.
