The Top Five European ETFs

The ETF industry continued to grow last year in Europe despite the credit crunch. Assets Under Management (AUM) grew by 6.49% from the start of the year. In 2008, the widely watched European Blue Chips Index DJ Euro Stoxx 50 dropped by 44.37%. By the end of the year, there were 1,553 ETFs listed in European Exchanges.About 67% of all ETF assets in Europe were invested in equity ETFs.

Of the hundreds of ETFs available, the following are the top five ETFs in Europe as of 2008 end based on assets held:


Source: ETF Industry-Europe Market Review 2008 from Lyxor Asset Management (a division of Societe Generale, France)

The number two ETF EONIA fom db-xtackers is a money-market funds cash ETF. The top ETF is the Lyxor ETF DJ Euro STOXX 50 from Lyxor with over 5.14 B EUR in assets. As of today March 11,2009 the AUM has shrunk to 4.075 B EUR. The Euro Stoxx 50 Index based ETFs occupy two spots in the list above. This is because this index gives easy exposure to the top 50 blue chip companies in the Euro Zone (excl. UK).

US-based investors can invest in the DJ Euro Stoxx Index via the SPDR DJ Euro Stoxx50 ETF (FEZ) from State Street Global Advisors. The expense ratio is 0.29% and the total net assets is $96M. The current dividend yield is 7.38% though that may fall since the index has many financials such as ING (ING) which may cut dividends. However about 80% of the portfolio is in non-financial sectors where dividends are relatively safer. France and Germany account for 70% of the portfolio.

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