One of the best ways to gain exposure to different countries in Europe is by using the Exchange Traded Funds (ETFs) for each country. iShares has 11 country based ETFs for Western Europe. These are called the iShares MSCI Series.
Out of these 11 ETFs, 9 ETFs have more than 50% of the portfolio assets in just the top 10 stocks in the portfolio. So these funds are heavily concentrated in a small number of stocks in each market. The only two funds that have less then 50% of the portfolio assets in the top 10 stocks are the iShares UK ETF – EWU and the iShares EMU Index Fund – EZU.
Among the 11 ETFs, the following have about 40-50% in Financials. While this may be a good thing for wonderful dividends and stability, it does have some risk due to the current market conditions on financials:
1. iShares Belgium ETF – EWK
2. iShares Italy ETF – EWI
3. iShares Netherlands ETF – EWN
4. iShares Spain ETF – EWP
The Austria ETF – EWO, EWP and Sweden ETF – EWD have had a average annual return of over 20% for the past 5 years. All the other ETFs have returned an average of above 10% but below 20%.
All these ETFs have a good portion of their assets invested in financials.
iShares UK ETF – EWU and ishares Germany ETF – EWG have assets of over $1B+ whereas the European Monetary Union (EMU) ETF – EMU has over nearly $3B in assets. The smallest of these ETFs is the Belgium ETF – EWK with assets of around $150M.
There are many other ETFs in the market such as those from ProShares, WisdomTree, Vanguard etc. But iShares is the market leader and is known for their innovative products such these country wise ETFs.
The other ETFs are iShares Switzerland – EWL and the ishares France fund – EWQ. Out of all these funds EWL had the least average return for the past five years.
iShares charges an expense ratio of about 0.50% on average for these funds.So if you are investor that wants exposure to European markets but do not want to take the mutual fund route, then pick up a few of these country-wise ETFs from iShares. You won’t be disappointed !!
