Best European ETFs UK to Watch
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Alongside the US stock market, European ETFs have been experiencing their longest rally for just under a decade. Namely, the Stoxx 600 European financials ETF secured its seventh consecutive month of gains last month and is currently up by 13.22% in YTD gains.
Key Takeaways on European ETFs
List of 10 Popular European ETFs in 2022
The European ETF portfolios focus on the Eurozone’s more developed exchanges such as the UK, Germany, France, Switzerland, and the Netherlands. Here are some European ETFs based on trading volumes.
- SPDR Portfolio Europe ETF
- Franklin FTSE Europe ETF
- iShares MSCI Europe Small-Cap ETF
- iShares Core MSCI Europe ETF
- Xtrackers MSCI Europe Hedged Equity ETF
- JPMorgan BetaBuilders Europe ETF
- Vanguard FTSE Europe ETF
- Amundi ETF MSCI Europe Banks UCITS ETF
- iShares International Treasury Bond
- iShares Euro Dividend UCITS ETF
1. SPDR Portfolio Europe ETF (SPEU)
The SPDR Portfolio Europe ETF tracks the performance of the STOXX Europe Total Market Index. During standard market conditions, this European financials ETF invests around 80% of its total assets in the securities that make up the Europe index.
The ETFs uses a sampling strategy. This means the ETF doesn’t have to buy all the securities represented in the STOXX index. The index is a free-float market cap-weighted index set up to represent a basket of leading EU companies.
In terms of the fundamentals, the three holdings include Rogers Corp. with 2.08% net assets, Linde Plc with 1.17% net assets, and Unilever PLC with 1.05% net assets. On a one-year basis, the SPDR Portfolio Europe ETF has made returns of 24.86%. It has an expense ratio of 0.09% and has 7.3 million shares outstanding. The current price of the fund is $40.91 representing a daily change of -0.56%.
Despite the impact of the pandemic on the rest of the world, the SPDR Portfolio Europe ETF (Ticker: SPEU) market price has continued to rise from lows of roughly $30 in Q4 2020 to just under $44 in September 2021.
2. Franklin FTSE Europe ETF (FLEE)
The Franklin FTSE Europe ETF is designed to offer investment results that closely represent, before fees and expenses, the performance of the FTSE Developed Europe RIC Capped Index. The fund tracks the performance of mid and large-cap stocks from developed European markets.
When it comes to past performance, the two holdings include Rogers Corp. with 2.38% net assets, and Unilever PLC with 1.20% net assets. On a one-year basis, the Franklin FTSE Europe ETF has made returns of 24.18%. It has an expense ratio of 0.09% and has 6.8 million shares outstanding. The current price of the fund is $28.28 representing a daily change of -0.56%.
Since November 2020, this European ETF’s market price has risen by 30.4% from $21.68 to the current price of $28.28.
3. iShares MSCI Europe Small-Cap ETF (IEUS)
The iShares MSCI Europe Small-Cap ETF seeks to track the performance of the MSCI Europe Small Cap Index consisting of small-cap European equities. The index is a free float-adjusted index that tracks equities across 15 developed EU markets.
In terms of past performance, the holdings include Aercap Holdings N.V. with 0.45% net assets. On a one-year basis the iShares MSCI Europe UCITS ETF has made returns of 28.79%. It has an expense ratio of 0.40% and has 6.6 million shares outstanding. The current price of the fund is $68.09 representing a daily change of -0.84%.
Since October 28th, 2020 the fund’s market price has increased by 39.5% from $48.82 to $68.09.
4. iShares Core MSCI Europe ETF (IEUR)
This exchange-traded fund tracks the investment performance of the MSCI Europe IMI. The index is a free float-adjusted market cap weighted index made up of equities from 15 developed markets in Europe such as the United Kingdom, Austria, Sweden, and Norway.
With regards to past performance, the two holdings include Rogers Corp. with 2.16% net assets, and Unilever PLC with 1.09% net assets. On a one-year basis the IEUR has made returns of 24.05%. It has an expense ratio of 0.09% and has 90.8 million shares outstanding. The current price of the fund is $56.10 representing a daily change of -0.67%.
Since October 2020 the fund’s market price has jumped by 32.2% from $42.45 to $56.10.
5. Xtrackers MSCI Europe Hedged Equity ETF (DBEU)
This European ETF tracks the market performance of the MSCI Europe US Dollar Hedged Index. The fund seeks investment results that are generally comparable to the performance of the underlying index, which is designed to track the performance of developed markets in Europe.
This European ETF uses a passive investing strategy, while minimising exposure to fluctuations in the value of the US dollar versus the fiat currencies of other major European countries. It will invest at least 80% of its total assets in the underlying index’s securities.
On a one-year basis the DBEU has made returns of 25.33%. It has an expense ratio of 0.45% and has 17.2 million shares outstanding. The current price of the fund is $34.22 representing a daily change of -0.35%.
Since October 2020 the ETF’s market price has jumped by 31.9% from $25.95 to $34.22.
6. JPMorgan BetaBuilders Europe ETF (BBEU)
The JPMorgan BetaBuilders Europe ETF tracks the performance of the Morningstar Developed Europe Target Market Exposure IndexSM. The underlying index is a free float-adjusted index that is made up of stocks from several developed European exchanges.
In terms of past performance, on a one-year basis this European ETF has made returns of 23.56%. It has an expense ratio of 0.09% and has 151.3 million shares outstanding. The current price of the fund is $57.26 representing a daily change of -0.61%.
Since October 2020 this European ETF’s market price has jumped by 32.1% from $43.35 to $57.26.
7. Vanguard FTSE Europe ETF (VGK)
The Vanguard FTSE tracks the performance of a benchmark index that measures the investment return of stocks issued by publicly traded companies listed in major European stock exchanges. The fund uses an indexing investment approach that invests all of its assets in the equities included in the FTSE Developed Europe All Cap Index.
As for past performance, on a one-year basis this European ETF has made returns of 24.12%. It has an expense ratio of 0.08% and has 311 million shares outstanding. The current price of the fund is $65.71 representing a daily change of -0.59%.
Since October 2020 this European ETF’s market price has jumped by 32.4% from $49.64 to $65.71. For Vanguard ETFs be sure to also read our in-depth guide.
8. Amundi ETF MSCI Europe Banks UCITS ETF
The Amundi ETF MSCI Europe Banks UCITS ETF is a European banks ETF.
The investment aims to follow the MSCI Europe Banks index’s price and yield performance before fees and expenditures. The index is a stock market index calculated and issued by MSCI Inc., a global index provider. The stocks that make up the index are issued by European banking corporations.
This ETF allows investors to gain exposure to roughly 50 European bank stocks with a single investment. The largest holdings in the index as of 30/09/21 include HSBC HOLDING PLC GBP with a weighting of 13.47%, and BNP PARIBAS with a 9.01% weighting.
In terms of the past performance as of October 2021, on a YTD basis the Amundi ETF market price has risen by 38.09%.
9. iShares International Treasury Bond (IGOV)
The iShares International Treasury Bond (IGOV) is a European bonds ETF. This fund holds bonds denominated in local fiat currencies. The IGOV ETF tracks the S&P/Citigroup International Treasury Bond Index Ex-US. The ETF’s holdings include European nations such as Sweden, Norway, Spain, Italy, Belgium, France, the UK, and Ireland.
It’s currently trading on the NASDAQ exchange for 50.86 USD, with a 52-week high of $55.97 and a 52-week low of $50.73. On a five-year basis the iShares International Treasury Bond ETF has risen by 4.97%. Since the beginning of the fiscal year, Q1 2021, IGOV has dropped by -8.72%. Some market analysts and ETF traders are looking to invest in this European ETF while the prices are bearish, in anticipation of a potential upswing in the long term.
10. iShares Euro Dividend UCITS ETF
The iShares Euro Dividend UCITS ETF is a dividend fund that is designed to track the performance of the EURO STOXX Select Dividend 30 benchmark index made up of 30 stocks with market-leading dividend yields chosen from European countries.
The iShares Euro Dividend UCITS ETF (IDVY) gives investors exposure to diversified European businesses with high dividend yields. By investing in the IDVY you’ll have direct access to 30 publicly-traded companies from the European Union.
In terms of the European dividend ETF’s performance, on a yearly basis the fund has amassed a total return of 39.26%. The fund also has a total expense ratio of just 0.40%. It is currently trading at 20.52 EUR, which represents a 24-hour change of +0.05%. The MSCI ESG Quality Score as of August 2021 is 7.81.
Important Features of European ETFs
The EURO STOXX 600 equity index has recently secured its seventh consecutive month of gains. Major catalysts for this positive run include robust corporate earnings in comparison to 2020’s Covid-induced downturn, resumption of business activities and economies, as well as boosted monetary stimulus into the global economy.
Publicly-listed constituents of the Stoxx index have reported strong total net incomes for Q2 2021 representing growth of just under 250% from the year-ago quarter, when pandemic lockdowns sent the European economy into its fastest contraction since records began.
What does the leading data provider FactSet have to say about the STOXX Europe 600 positive earnings?
According to data provider FactSet, the percentage of European companies beating analysts’ earnings predictions touched a five-year high in the second quarter:
“With more than 85% of companies in the STOXX Europe 600 having reported second-quarter earnings, earnings growth is through the roof. In March, analysts were projecting EPS growth of a whopping 155%; with earnings season about to wrap up, the reported earnings growth for the quarter is a remarkable 248%.”
What European ETF Is Similar To The S&P 500?
The European ETF that is most similar to the S&P 500 is the STOXX Europe 600. The STOXX Europe 600 and the S&P 500 are two prominent stock market indices that share several similarities. Firstly, both indices serve as benchmarks for their respective regions, with the STOXX Europe 600 covering a wide range of European countries and the S&P 500 representing the US market. Secondly, they both aim to provide investors with a comprehensive snapshot of the performance of the underlying equity markets. Both indices are market capitalization-weighted, meaning that the larger companies have a greater impact on the index value.
Additionally, both the STOXX Europe 600 and the S&P 500 are widely recognized and closely followed by investors, analysts, and financial professionals around the world. Despite their geographic differences, these indices provide valuable insights into the overall health and trends of the European and US stock markets respectively, making them important tools for assessing market performance and making investment decisions.
What Is The Largest European ETF?
The largest European ETF in 2023 is JPMorgan BetaBuilders Europe ETF BBEU- an ETF provided by JPMorgan Asset Management that is designed to track the movement of the Morningstar Europe Target Market Exposure Index. The ETF is popular amongst investors because it offers strong exposure to the European equity market which allows investors to take advantage of potential growth in this sector while diversify across several companies to spread risk. The BBEU ETF aims to deliver performance that closely matches the overall European market by tracking the Morningstar Europe Target Market. The ETF also provides intraday liquidity which allows investors to buy and sell shares throughout the trading day.
Conclusion
Investors and traders are looking at European ETFs to ride out the bullish post-pandemic fundamentals. We have picked ten European ETFs that have reported gains and positive returns in YTD earnings.
Frequently Asked Questions on European ETFs
What is a European ETF?
How do I buy European ETFs?
Dassos Troullides
