Top 10 European Regional 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 is currently an expanding list of 30 ETFs oriented to Europe 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. Also included are some so-called ⿿enhanced⿝ indexes that attempt to achieve better performance through more active management of the index.

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.

It goes without saying that troubles in the euro zone 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.

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.

VGK (Vanguard Europe ETF) 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 (Assets under Management) equal $2.6 billion and average daily trading volume is 2.6M shares.  As of early November 2011 the annual dividend yield was 5.65% and YTD return -6.30%.

Direxion Shares and ProShares offer inverse and leveraged long/short ETFs for those wishing to hedge or speculate here.

Data as of November 2011

VGK Top Ten Holdings & Weightings
  1. Nestle SA (NESN): 2.83%
  2. HSBC Holdings PLC (HBCYF): 2.30%
  3. Novartis AG (NVSEF): 1.87%
  4. BP Plc (BP.): 1.74%
  5. Vodafone Group PLC (VODPF): 1.71%
  6. Total SA (FP): 1.60%
  7. Roche Holding AG (RHHVF): 1.54%
  8. Siemens AG (SIE): 1.48%
  9. GlaxoSmithKline PLC (GLAXF): 1.46%
  10. Rio Tinto PLC (RIO): 1.37%

IEV (iShares Europe 350 ETF) 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 488K shares. As of early November 2011 the annual dividend yield was 3.21% and YTD return -6.4%.

Direxion Shares and ProShares offer inverse and leveraged long/short ETFs for those wishing to hedge or speculate here.

Data as of November 2011

IEV Top Ten Holdings & Weightings
  1. Nestle SA (NESN): 3.20%
  2. HSBC Holdings PLC (HBCYF): 2.48%
  3. Novartis AG (NVSEF): 2.48%
  4. Vodafone Group PLC (VODPF): 2.25%
  5. BP Plc (BP.): 2.24%
  6. Royal Dutch Shell PLC (RDSA): 2.03%
  7. Total SA (FP): 1.96%
  8. Roche Holding AG (RHHVF): 1.85%
  9. GlaxoSmithKline PLC (GLAXF): 1.81%
  10. Royal Dutch Shell PLC B (RDSB): 1.55%

EZU (iShares EMU ETF) 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 $728 billion and average daily trading volume is 490K shares. As of early November 2011 the annual dividend yield was 3.66% and YTD return -11.32%.

Data as of November 2011

EZU Top Ten Holdings & Weightings
  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%

FEZ (SPDR DJ Euro STOXX 50 ETF) 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 $130 million and average daily trading volume around 103K shares. As of early November 2011 the annual dividend yield was 5.49% and YTD return -10.30%.

Data as of November 2011

FEZ Top Ten Holdings & Weightings
  1. Total SA (FP): 6.09%
  2. Siemens AG (SIE): 4.77%
  3. Sanofi (SAN): 4.64%
  4. Telefonica SA (TEF): 4.44%
  5. Banco Santander SA (SAN): 3.78%
  6. Basf SE (BFFAF): 3.55%
  7. Eni SpA (ENI): 2.98%
  8. Sap AG (SAP): 2.93%
  9. Unilever NV (UNA): 2.81%
  10. Bayer AG (BAYN): 2.78%

FEU (SPDR DJ STOXX 50 ETF) 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 $32 million and average daily trading volume is 9K shares. As of early November 2011 the annual dividend yield was 5.66% and YTD return of -4.05%.

Data as of November 2011

FEU Top Ten Holdings & Weightings
  1. Nestle SA (NESN): 5.69%
  2. Novartis AG (NVSEF): 4.63%
  3. HSBC Holdings PLC (HBCYF): 4.63%
  4. Vodafone Group PLC (VODPF): 4.19%
  5. BP Plc (BP.): 4.12%
  6. Royal Dutch Shell PLC (RDSA): 3.79%
  7. Total SA (FP): 3.46%
  8. Roche Holding AG (RHHVF): 3.45%
  9. GlaxoSmithKline PLC (GLAXF): 3.42%
  10. British American Tobacco PLC (BATS): 2.76%

DFE (WisdomTree Europe SmallCap Dividend ETF) 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 $23 million and average daily trading volume is 8K shares. As of early November 2011 the annual dividend yield was 5.82 % and YTD return -.13.00%.

Data as of November 2011

DFE Top Ten Holdings & Weightings
  1. Cofinimmo (COFB): 1.41%
  2. Antena 3 de Television, S.A. (A3TV): 1.24%
  3. NCC AB (NCC B): 1.23%
  4. Close Brothers Group PLC (CBG): 1.12%
  5. De La Rue PLC (DLAR): 1.02%
  6. comdirect bank AG (COM): 0.90%
  7. Greene King PLC (GNK): 0.85%
  8. Tieto Oyj (TIE1V): 0.83%
  9. Fabege AB (FABG): 0.79%
  10. Cattolica Assicurazioni (CASS): 0.79%

GUR (SPDR S&P Emerging Europe ETF) follows the S&P European Emerging BMI Capped Index. The fund was launched in March 2007. The expense ratio is .59%. AUM equal $117 million and average daily trading volume is 71K shares. As of early November 011 the annual dividend yield was 2.82% and YTD return -12.54%. As a special note, Russia constitutes over 60% of the fundâ¿¿s holdings.

Data as of November 2011

GUR Top Ten Holdings & Weightings
  1. Gazprom O A O 144A: 16.79%
  2. Lukoil Company ADR (LUKOY): 7.12%
  3. Sberbank of Russia OJSC: 6.63%
  4. Oao Novatek GDR (NVTK): 5.97%
  5. Mining And Metallurgical Company Norilsk Nickel JSC, Taimirsky Re (NILSY): 4.80%
  6. Rosneftegaz Ojsc 144A: 3.18%
  7. Surgutneftegaz OJSC ADR (SGTZY): 3.02%
  8. Cez A.S., Praha: 2.55%
  9. Turkiye Garanti Bankasi A.S. (GARAN): 2.47%
  10. JSC Uralkali GDR (URKA): 2.11

GXF (Global X Nordic 30 ETF) 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 $27 million and average daily trading volume is 14K shares. As of early November 2011 the annual dividend yield was .95% and YTD return -12.50%.

Data as of November 2011

GXF Top Ten Holdings & Weightings
  1. Novo Nordisk A/S ADR (NVO): 10.40%
  2. Statoil ASA ADR (STO): 6.97%
  3. Ericsson Telephone Company ADR (ERIC): 6.74%
  4. Nordea Bank AB (NDA SEK): 5.93%
  5. Nokia Oyj ADR (NOK): 5.42%
  6. Hennes & Mauritz AB (HM B): 4.15%
  7. Volvo Corporation (VOLVF): 3.90%
  8. Svenska Handelsbanken (SHB A): 3.83%
  9. Sandvik AB (SDVKF): 3.52%
  10. Sampo Oyj (SAMAS): 3.32%

 

ADRU (PowerShares BLDRS Europe 100 ADR ETF) 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 $18 million and average daily trading volume is 4K shares. As of early November 2011 the annual dividend yield was 3.70% and YTD return -4.30%.

Data as of November 2011

ADRU Top Ten Holdings & Weightings
  1. Novartis AG ADR (NVS): 5.91%
  2. HSBC Holdings PLC ADR (HBC): 5.22%
  3. Vodafone Group PLC ADR (VOD): 4.96%
  4. BP Plc ADR (BP): 4.35%
  5. Royal Dutch Shell PLC ADR A (RDS.A): 4.29%
  6. GlaxoSmithKline PLC ADR (GSK): 4.13%
  7. Total SA ADR (TOT): 3.75%
  8. British American Tobacco PLC ADR (BTI): 3.30%
  9. Royal Dutch Shell PLC ADR B (RDS.B): 3.25%
  10. Siemens AG ADR (SI): 2.98%

FDD (First Trust DJ STOXX Select Dividend 30 ETF) 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 equal $10 million and average daily trading volume is only 8K shares. As of early November 2011 the annual dividend yield was 5.47%. and YTD return -4.80%.

A note of caution: since the fund has been in existence since 2007 and hasnâ¿¿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 itâ¿¿s something to consider.

During 2011 weâ¿¿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.

All this has made 2011 a roller coaster of volatility and uncertainty. When bailouts and rescues are apparent markets rally and when anxiety reappears markets decline. . 

There is a lot to choose from in terms of indexes linked to ETFs. Some are passive and duplicative relatively. Itâ¿¿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 Schwabâ¿¿s ETFs and Scottradeâ¿¿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 arenâ¿¿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 Twitter and Facebook as well and join our group conversations.

 

You may address any feedback to: feedback@etfdigest.com   

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 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.

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