Equity: Developed Europe - Total Market

OEUH Top Performer Intra-day
Price $27.63
Today’s Change +0.38%(1.38)
2:22pm 06/23/2017
GSEU Bottom Performer Intra-day
Price $29.58
Today’s Change -0.34%(-1.12)
3:28pm 06/23/2017
  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

The Developed Europe - Total Market segment expanded massively due to a slew of launches in 2014 and 2015. Currency hedging has been a major theme among the new funds, forcing investors toCurrency hedging has been a major theme select both their currency exposure and their geographic definition of Europe, among many other considerations.

A few funds stand out and serve to highlight key distinctions within the segment. Vanguard’s VGK wins Analyst Pick for broad coverage, low fees and excellent liquidity. IEUR also provides excellent exposure for a low fee, and has gathered a very strong following since its 2014 launch, even if it can’t match VGK’s liquidity. iShares’ EZU also trades extremely well, but limits its holdings to companies from eurozone countries. That means it excludes stocks from the UK, Switzerland and Sweden like Royal Dutch Shell, Nestle and HSBC.

The definitional difference of eurozone vs Europe carries over to nonvanilla funds. New fund HEZU offers straightforward, euro-hedged exposure to EZU, while DBEU, launched in 2013, hedges its currency exposures against currencies across developed Europe, not just the eurozone. WisdomTree’s blockbuster HEDJ goes beyond currency hedging. It limits its portfolio to dividend-paying eurozone companies that derive the majority of their revenues from exports outside the eurozone and hedges against the euro. Both EZU and HEDJ earn a spot on our Opportunities list for interesting takes on the space in an ownable, tradable wrapper. HEDJ also stands out for truly phenomenal investor inflows in 2015, and likely drove many issuers to bring additional ETFs to market.

While the new slew of funds brings more exposure choices, many lack the AUM and liquidity of their more established counterparts: SBEU, STXX and FEUZ are examples of newer funds with tiny AUM and poor liquidity. Fees vary widely too, and investors lack the benefit of a tracking record for the newer funds. (Insight updated 06/23/17)

All Funds (32)

IEUR $2.42 B 2423082430 low fee; solid AUM

A 99
E
98
98
T
87
87
F
99
99

VGK $16.07 B 16065710923.26 Large & liquid

A 97
E
97
97
T
91
91
F
97
97

EZU $13.22 B 13218536230 Eurozone only

A 85
E
91
91
T
89
89
F
85
85

EUMV $35.54 M 35543415 weak asset uptake so far

B 70
E
89
89
T
60
60
F
70
70

DBEU $2.71 B 2714624727.957 Currency-hedged

B 53
E
86
86
T
88
88
F
53
53

DBEZ $64.43 M 64429079.967 Currency-hedged

B 52
E
86
86
T
68
68
F
52
52

HEDJ $9.82 B 9822131370 popular non-vanilla

B 44
E
84
84
T
92
92
F
44
44

EUDG $20.3 M 20298080 New launch, high yield

C 78
E
77
77
T
58
58
F
78
78

FEP $440.71 M 440711403.95418 decent assets

C 77
E
68
68
T
84
84
F
77
77

DDEZ $1.48 M 1484913.7836 N/A

C 66
E
79
79
T
49
49
F
66
66

EDOM $2.81 M 2814052.5576 Bets on homegrown growth

C 63
E
80
80
T
57
57
F
63
63

JPEU $68.65 M 68647754.831553 N/A

D 59
E
73
73
T
60
60
F
59
59

HEZU $1.57 B 1568739795 strengthening assets

D 38
E
62
62
T
89
89
F
38
38

FEUZ $11.78 M 11778711.52422 trades poorly

F 54
E
68
68
T
37
37
F
54
54

RFEU $64.24 M 64237547.357 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

HFXE $133.6 M 133599869.223 50% currency hedge

N/A 0
E
0
-1
T
0
-1
F
0
-1

PTEU $38.26 M 38259000 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

EUDV $9.08 M 9078750 consistent dividend growth focus

N/A 0
E
0
-1
T
0
-1
F
0
-1

SCID $18.42 M 18417754.396733 competes with SBEU

N/A 0
E
0
-1
T
0
-1
F
0
-1

HGEU $4.15 M 4148000 vanilla currency hedged

N/A 0
E
0
-1
T
0
-1
F
0
-1

FXEU $5.89 M 5893273.573 currency hedged low volatility

N/A 0
E
0
-1
T
0
-1
F
0
-1

DEZU $2.76 M 2761970 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

OEUH $17.95 M 17949062.6139 new - trade with care

N/A 0
E
0
-1
T
0
-1
F
0
-1

HEUV $3.83 M 3826125 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

GSEU $38.78 M 38779000 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

DBSE $2.37 M 2372523.725 Developed Southern Europe with FX hedge

N/A 0
E
0
-1
T
0
-1
F
0
-1

OEUR $62.12 M 62116024.8464 new - trade with care

N/A 0
E
0
-1
T
0
-1
F
0
-1

JPEH $29.4 M 29397259.299996 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

EZR $2.47 M 2468508.7364 Bets on homegrown growth

C 67
E
81
81
T
56
56
F
67
67

PAEU $2.68 M 2675000 N/A

N/A 0
E
0
-1
T
0
-1
F
0
-1

SBEU $1.11 M 1109000 new - trade with care

N/A 0
E
0
-1
T
0
-1
F
0
-1

STXX $5.86 M 5860585 Full replication

F 87
E
61
61
T
31
31
F
87
87

ETF.com Grade as 06/15/17

Equity: Developed Europe - Total Market

Performance Dispersion
Performance  [as of 06/22/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: MSCI Europe IMI-1.13%8.93%15.98%16.07%0.09%10.22%--
A 98.617203IEUR2423082430IEURiShares Core MSCI Europe ETF-1.31%8.72%16.39%16.10%0.08%----
A 97.247051VGK16065710923.26VGKVanguard FTSE Europe ETF-1.36%8.76%16.58%16.13%-0.14%9.79%1.09%
A 85.045434EZU13218536230EZUiShares MSCI Eurozone ETF-0.76%10.27%18.43%22.24%0.38%11.59%-0.51%
B 69.873601EUMV35543415EUMViShares Edge MSCI Min Vol Europe ETF-0.60%10.03%17.86%8.51%1.79%----
B 53.115556DBEU2714624727.957DBEUDeutsche X-trackers MSCI Europe Hedged Equity ETF-0.07%6.15%11.59%24.12%6.99%----
B 52.320254DBEZ64429079.967DBEZDeutsche X-trackers MSCI Eurozone Hedged Equity ETF0.27%7.72%13.47%26.61%------
B 44.003852HEDJ9822131370HEDJWisdomTree Europe Hedged Equity Fund0.41%6.42%14.19%28.21%8.92%13.98%--
C 77.672858EUDG20298080EUDGWisdomTree Europe Quality Dividend Growth Fund-0.88%10.63%20.63%16.20%1.32%----
C 77.456197FEP440711403.95418FEPFirst Trust Europe AlphaDEX Fund-0.92%10.64%19.91%20.52%1.74%12.51%--
C 66.22808DDEZ1484913.7836DDEZWisdomTree Dynamic Currency Hedged Europe Equity Fund-0.11%8.41%14.60%23.50%------
C 62.600219EDOM2814052.5576EDOMWisdomTree Europe Domestic Economy Fund0.18%12.35%21.19%22.08%------
D 58.794339JPEU68647754.831553JPEUJPMorgan Diversified Return Europe Equity ETF-0.92%9.83%16.98%13.07%------
D 37.895281HEZU1568739795HEZUiShares Currency Hedged MSCI Eurozone ETF0.13%7.36%12.97%26.01%------
F 53.982643FEUZ11778711.52422FEUZFirst Trust Eurozone AlphaDEX ETF-0.08%12.33%20.83%27.56%------
N/A 0RFEU64237547.357RFEUFirst Trust RiverFront Dynamic Europe-1.29%9.23%17.21%23.29%------
N/A 0HFXE133599869.223HFXEIQ 50 Percent Hedged FTSE Europe ETF-0.82%7.74%13.70%12.33%------
N/A 0PTEU38259000PTEUPacer Trendpilot European Index ETF-0.71%10.38%18.73%24.66%------
N/A 0EUDV9078750EUDVProShares MSCI Europe Dividend Growers ETF-0.56%11.74%16.90%7.58%------
N/A 0SCID18417754.396733SCIDGlobal X Scientific Beta Europe ETF-0.45%10.77%19.07%16.15%------
N/A 0HGEU4148000HGEUProShares Hedged FTSE Europe ETF-0.53%6.57%11.88%21.10%------
N/A 0FXEU5893273.573FXEUPowerShares Europe Currency Hedged Low Volatility Portfolio1.77%10.12%15.51%19.94%------
N/A 0DEZU2761970DEZUiShares Adaptive Currency Hedged MSCI Eurozone ETF-0.37%8.42%--20.26%------
N/A 0OEUH17949062.6139OEUHO'Shares FTSE Europe Quality Dividend Hedged-0.29%5.89%12.04%14.62%------
N/A 0HEUV3826125HEUViShares Edge MSCI Min Vol Europe Currency Hedged ETF1.52%8.39%14.14%16.70%------
N/A 0GSEU38779000GSEUGoldman Sachs ActiveBeta Europe Equity ETF-1.30%9.55%17.20%14.98%------
N/A 0DBSE2372523.725DBSEDeutsche X-Trackers MSCI Southern Europe Hedged Equity ETF0%7.38%14.81%5.76%------
N/A 0OEUR62116024.8464OEURO'Shares FTSE Europe Quality Dividend-0.43%9.60%17.11%9.19%------
N/A 0JPEH29397259.299996JPEHJPMorgan Diversified Return Europe Currency Hedged1.28%12.01%--11.41%------
C 67.216951EZR2468508.7364EZRWisdomTree Europe Local Recovery Fund5.51%7.64%7.86%9.93%------
N/A 0PAEU2675000PAEUPacer Autopilot Hedged European Index ETF6.99%11.60%5.09%7.90%------
N/A 0SBEU1109000SBEUETFS Diversified-Factor Developed Europe Index Fund-9.86%-8.44%-9.12%-8.55%------
F 86.863686163141STXX5860585STXXALPS STOXX Europe 6000.84%3.10%-1.84%0.48%------
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

The number of ETFs in the Developed Europe Total Market segment has more than quadrupled since the start of 2014. While more choice is a good thing, investors are confronted with a lack ofHEDJ has attracted huge asset base since its strategy change in 2012 tracking history and a varied mix of asset-gathering success. Tracking history matters greatly because fees and actual holding costs as measured by tracking don’t always align. AUM matters too as a predictor of viability and to a lesser extent, liquidity.

The older funds in the segment generally enjoy first-mover status with respect to AUM. VGK stands out as a winner with an extremely low fee, a huge asset base and 10+ years of history. EZU boasts an even longer track record and also has billions of dollars in AUM, but charges about 4x more. Still, EZU typically costs far less to hold than its high fee implies, as shown by its lower median tracking difference. HEDJ, launched in 2009, was a relatively unpopular fund that switched gears in August 2012 to focus on Europe, accumulating a huge asset base since its strategy change. DBEU has also attracted strong investor interest in a short time, also without the aid of a bargain-basement fee.

Among the 7 funds launched in 2014, IEUR and HEZU stand out for assets and tracking—good tracking aided by a low fee for IEUR, and bad tracking with a caveat for HEZU. The caveat: HEZU holds an ETF (EZU) that trades in New York rather than a basket of stocks that trade in Europe, so it’s out of sync with its index from a tracking perspective. This doesn’t harm investors, but it does make true holding costs hard to determine. The remaining 5 funds in the class of 2014 have nowhere near the asset levels of IEUR and HEZU. Among these, we currently see closure risk for 4 of the 5—STXX, FEUZ, EUMV and EUDG—and the 5th fund, DBEZ, has only modest AUM. Low fees don't guarantee success: STXX and EUMV are cheap, but struggle to attract investor interest right alongside high-priced FEUZ.

Among the many funds launched so far in 2015, FXEU has gained traction with investors, while SBEU and SCID still have extremely low asset totals. Fees vary greatly here too, and while holding costs generally correlate with fees, choosing one fund over another based on a 5 bp fee difference is often a lousy way to pick an ETF.

In all, investors should consider starting their fund selection process with Efficiency, perhaps setting minimum bounds for track record length and/or AUM and keeping large fee differences in mind as well. (Insight updated 06/23/17)

All Funds (32)

98
98.497469
97
97.410703
91
91.188332
89
89.194686
86
86.225164
86
85.999435
84
84.150013
80
79.894154
79
79.368378
77
77.03742
73
73.122319
68
67.672515
68
67.599792
62
61.620181
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
81
80.543641
N/A
0
N/A
0
61
61.064646205392

ETF.com Grade as 06/15/17

Equity: Developed Europe - Total Market

Tracking Difference (12 Month)

Ticker Expense Ratio Median Max. Upside Max. Downside Max LT/ST Cap Gains Rate Rule Legal Structure Fund Closure Risk Efficiency
OEUH O'Shares FTSE Europe Quality Dividend Hedged 0.68% -- -- -- 20.00% / 39.60% High 0
GSEU Goldman Sachs ActiveBeta Europe Equity ETF 0.25% -- -- -- 20.00% / 39.60% Medium 0
EZU iShares MSCI Eurozone ETF 0.48% -0.09% 0.01% -0.21% 20.00% / 39.60% Low 91.188332
OEUR O'Shares FTSE Europe Quality Dividend 0.58% -- -- -- 20.00% / 39.60% Low 0
JPEH JPMorgan Diversified Return Europe Currency Hedged 0.49% -- -- -- 20.00% / 39.60% High 0
FEP First Trust Europe AlphaDEX Fund 0.80% -0.70% 0.72% -2.06% 20.00% / 39.60% Low 67.599792
RFEU First Trust RiverFront Dynamic Europe 0.83% -- -- -- 20.00% / 39.60% Medium 0
FEUZ First Trust Eurozone AlphaDEX ETF 0.80% -1.68% -0.25% -3.22% 20.00% / 39.60% High 67.672515
SCID Global X Scientific Beta Europe ETF 0.38% -- -- -- 20.00% / 39.60% High 0
EDOM WisdomTree Europe Domestic Economy Fund 0.48% -0.13% 0.11% -0.34% 20.00% / 39.60% High 79.894154
FXEU PowerShares Europe Currency Hedged Low Volatility Portfolio 0.25% -- -- -- 20.00% / 39.60% High 0
DBEU Deutsche X-trackers MSCI Europe Hedged Equity ETF 0.45% -0.41% -0.18% -0.54% 20.00% / 39.60% Low 86.225164
HEDJ WisdomTree Europe Hedged Equity Fund 0.58% -0.67% -0.32% -1.14% 20.00% / 39.60% Low 84.150013
VGK Vanguard FTSE Europe ETF 0.10% -0.02% 51.95% -0.08% 20.00% / 39.60% Low 97.410703
DBEZ Deutsche X-trackers MSCI Eurozone Hedged Equity ETF 0.45% -0.04% 0.13% -0.18% 20.00% / 39.60% Low 85.999435
HEUV iShares Edge MSCI Min Vol Europe Currency Hedged ETF 0.28% -- -- -- 20.00% / 39.60% High 0
JPEU JPMorgan Diversified Return Europe Equity ETF 0.43% -- -- -- 20.00% / 39.60% Low 73.122319
DBSE Deutsche X-Trackers MSCI Southern Europe Hedged Equity ETF 0.45% -- -- -- 20.00% / 39.60% High 0
HEZU iShares Currency Hedged MSCI Eurozone ETF 0.51% -0.20% 3.32% -2.50% 20.00% / 39.60% Low 61.620181
EUDG WisdomTree Europe Quality Dividend Growth Fund 0.58% -0.33% -0.17% -0.86% 20.00% / 39.60% High 77.03742
HFXE IQ 50 Percent Hedged FTSE Europe ETF 0.46% -- -- -- 20.00% / 39.60% Low 0
PTEU Pacer Trendpilot European Index ETF 0.65% -- -- -- 20.00% / 39.60% Medium 0
EUDV ProShares MSCI Europe Dividend Growers ETF 0.55% -0.47% -0.40% -0.54% 20.00% / 39.60% High 0
HGEU ProShares Hedged FTSE Europe ETF 0.27% -- -- -- 20.00% / 39.60% High 0
DDEZ WisdomTree Dynamic Currency Hedged Europe Equity Fund 0.43% -- -- -- 20.00% / 39.60% High 79.368378
EUMV iShares Edge MSCI Min Vol Europe ETF 0.25% 0.02% 0.08% -0.12% 20.00% / 39.60% High 89.194686
IEUR iShares Core MSCI Europe ETF 0.10% 0.19% 0.27% 0.08% 20.00% / 39.60% Low 98.497469
DEZU iShares Adaptive Currency Hedged MSCI Eurozone ETF 0.51% -- -- -- 20.00% / 39.60% High 0
EZR WisdomTree Europe Local Recovery Fund -- -- -- 20.00% / 39.60% High 80.543641
PAEU Pacer Autopilot Hedged European Index ETF -- -- -- 20.00% / 39.60% Closing 0
SBEU ETFS Diversified-Factor Developed Europe Index Fund -- -- -- 20.00% / 39.60% Closing 0
STXX ALPS STOXX Europe 600 -- -- -- 20.00% / 39.60% High 61.064646205392

ETF.com Tradability Insight

Investor interest in Europe—especially in currency-hedged takes on Europe—has helped liquidity for some funds and driven issuers to launch a raft of new ETFs, some of whichVGK, EZU and HEDJ stand out in the segment for outstanding trading volume trade poorly.

VGK, EZU and HEDJ stand out in the segment for outstanding trading volume and tight spreads. Traders of all sizes and stripes can benefit from their strong liquidity.

While trading at lower volumes, DBEU and HEZU offer ample liquidity too and very tight spreads

IEUR and FEP are a significant step down in trading volume and especially in wider spreads, but can still be accessed fairly by investors who trade with limit orders (always a good idea). Trading early in the New York day when underlying markets are open is also advisable since iNAV is more accurate and spreads should be tighter.

The remaining funds should be traded with considerable care; in some cases, simply because the funds are still relatively new. Still, thin volume is thin volume, whatever the reason. Limit orders are mandatory for the funds with low volume. Recall too that spreads are derived from the average inside spread and give no indication of depth of book. Be wary of a fund with a respectable 15 bp average spread but anemic $100K median volume. (Insight updated 06/23/17)

All Funds (32)

92
91.568709
91
90.920681
89
89.471147
89
88.933655
88
87.544993
87
87.141369
84
84.263239
68
67.63715
60
60.469705
60
59.87922
58
58.336628
57
56.568197
49
49.197274
37
36.729664
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
56
55.579451
N/A
0
N/A
0
31
30.736569137242

ETF.com Grade as 06/15/17

Equity: Developed Europe - Total Market

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
HEDJ WisdomTree Europe Hedged Equity Fund $96.21 M 0.02% 29.44 31.00% 0.07% 0.03% None 91.568709
DEZU iShares Adaptive Currency Hedged MSCI Eurozone ETF $7.51 K 0.11% 0.01 100.00% 0.73% 0.01% None 0
HEUV iShares Edge MSCI Min Vol Europe Currency Hedged ETF $0 0.65% 0.00 100.00% 1,003.66% 0.01% None 0
GSEU Goldman Sachs ActiveBeta Europe Equity ETF $86.43 K 0.14% 0.06 31.00% 0.01% 0.20% None 0
HEZU iShares Currency Hedged MSCI Eurozone ETF $23.25 M 0.03% 15.28 100.00% 0.80% 0.01% None 89.471147
JPEH JPMorgan Diversified Return Europe Currency Hedged $0 0.59% 0 100.00% 23,891.00% 0.02% None 0
HFXE IQ 50 Percent Hedged FTSE Europe ETF $91.6 K 0.29% 0.09 30.00% 0.00% 0.31% None 0
RFEU First Trust RiverFront Dynamic Europe $616.14 K 0.29% 0.20 30.00% 0.26% 0.13% None 0
HGEU ProShares Hedged FTSE Europe ETF $12.82 K 0.85% 0.01 30.00% 0.01% 0% None 0
EDOM WisdomTree Europe Domestic Economy Fund $11.44 K 0.11% 0.00 32.00% 0.08% 0.15% None 56.568197
DBEU Deutsche X-trackers MSCI Europe Hedged Equity ETF $23.56 M 0.04% 16.71 31.00% 0.01% 0.26% None 87.544993
IEUR iShares Core MSCI Europe ETF $13.82 M 0.04% 2.90 31.00% 0.02% 0.32% None 87.141369
DBEZ Deutsche X-trackers MSCI Eurozone Hedged Equity ETF $409.27 K 0.13% 0.27 32.00% 0.01% 0.21% None 67.63715
OEUH O'Shares FTSE Europe Quality Dividend Hedged $115.0 K 0.79% 0.08 100.00% 558.78% 0.22% None 0
DBSE Deutsche X-Trackers MSCI Southern Europe Hedged Equity ETF $0 0.13% 0 34.00% 0.04% 0.04% None 0
OEUR O'Shares FTSE Europe Quality Dividend $584.97 K 0.38% 0.47 30.00% 0.02% 0.24% None 0
EUDG WisdomTree Europe Quality Dividend Growth Fund $102.34 K 0.16% 0.08 31.00% 0.03% 0.14% None 58.336628
EUDV ProShares MSCI Europe Dividend Growers ETF $49.83 K 0.88% 0.05 31.00% 0.09% 0.05% None 0
SCID Global X Scientific Beta Europe ETF $34.23 K 0.50% 0.02 31.00% 0.03% 0.80% None 0
EUMV iShares Edge MSCI Min Vol Europe ETF $192.64 K 0.14% 0.16 30.00% 0.04% 0.18% None 60.469705
VGK Vanguard FTSE Europe ETF $286.74 M 0.02% 52.60 31.00% 0.02% 0.09% None 90.920681
EZU iShares MSCI Eurozone ETF $300.44 M 0.02% 72.66 32.00% 0.04% 0.19% None 88.933655
JPEU JPMorgan Diversified Return Europe Equity ETF $88.96 K 0.10% 0.02 30.00% 0.07% 0.10% None 59.87922
FEP First Trust Europe AlphaDEX Fund $3.87 M 0.13% 2.24 30.00% 0.08% 0.23% None 84.263239
FEUZ First Trust Eurozone AlphaDEX ETF $104.58 K 0.83% 0.05 31.00% 0.11% 0.15% None 36.729664
PTEU Pacer Trendpilot European Index ETF $209.23 K 0.44% 0.15 31.00% 0.01% 0.35% None 0
FXEU PowerShares Europe Currency Hedged Low Volatility Portfolio $31.75 K 0.53% 0.02 31.00% 0.14% 0.06% None 0
DDEZ WisdomTree Dynamic Currency Hedged Europe Equity Fund $8.94 K 0.37% 0.00 31.00% 0.02% 0.17% None 49.197274
EZR WisdomTree Europe Local Recovery Fund $0 0 32.00% 0.09% 0.17% None 55.579451
PAEU Pacer Autopilot Hedged European Index ETF $0 -- 35.00% 0.01% 0.37% None 0
SBEU ETFS Diversified-Factor Developed Europe Index Fund $0 0.00 30.00% 0.03% 0.02% None 0
STXX ALPS STOXX Europe 600 $15.43 K 0.01 31.00% 0.01% 0.91% None 30.736569137242

ETF.com/ Block Liquidity

VGK
5
4
3
2
1
DBEU
5
4
3
2
1
EZU
5
4
3
2
1
FEP
5
4
3
2
1
HEDJ
5
4
3
2
1
IEUR
5
4
3
2
1
JPEU
5
4
3
2
1
PTEU
5
4
3
2
1
DDEZ
5
4
3
2
1
GSEU
5
4
3
2
1
RFEU
5
4
3
2
1
EDOM
5
4
3
2
1
DBEZ
5
4
3
2
1
DBSE
5
4
3
2
1
EUDG
5
4
3
2
1
EUDV
5
4
3
2
1
EUMV
5
4
3
2
1
FEUZ
5
4
3
2
1
FXEU
5
4
3
2
1
HEZU
5
4
3
2
1
HFXE
5
4
3
2
1
HGEU
5
4
3
2
1
OEUR
5
4
3
2
1
SCID
5
4
3
2
1
DEZU
5
4
3
2
1
JPEH
5
4
3
2
1
HEUV
5
4
3
2
1
OEUH
5
4
3
2
1
EZR
5
4
3
2
1
PAEU
5
4
3
2
1
SBEU
5
4
3
2
1
STXX
5
4
3
2
1

This measurement shows how easy it is to trade 25,000 shares of each ETF.

ETF.com Fit Insight

Investors must make 2 immediate decisions regarding the kind of developed Europe portfolio they want. The first is whether to define developed Europe as a landmass or as a currency bloc;HEDJ adds a screen for exporters and dividends to its hedged eurozone exposure the second is whether to hedge their currency exposure.

Funds that define Europe as a landmass have exposure to the UK, Switzerland and Sweden. The distinction is huge: these 3 countries make up roughly half of the exposure of funds like VGK and IEUR, but are excluded from eurozone-only ETFs like HEDJ and EZU. Eurozone-only ETFs instead typically load up on Germany and France to fill the basket.

Currency-hedged offerings take advantage of current incredibly low interest rates in Europe and marginally higher rates in the US, making the hedge very low cost or even a slight net gain for the fund. The FX overlay will outperform the unhedged approach when local currencies fall against the dollar, and vice versa. HEDJ and HEZU, among others, offer currency-hedged exposure to the eurozone, while DBEU and others includes the UK, Switzerland and Sweden, and hedge out direct pound, franc and krona exposure.

Investors face additional decisions on exposure too. One approach is to opt for “vanilla” coverage within the context of the geographic and currency-hedging decision points above, or alternative exposures.

Vanilla exposure means market-cap selected and weighted. VGK, IEUR and STXX offer excellent vanilla exposure to broader Europe with no currency hedge; EZU for eurozone unhedged; DBEU and HGEU for hedged broad Europe; and DBEZ and HEZU for eurozone hedged.

Alternatively, HEDJ adds a screen for exporters and dividends to its hedged eurozone exposure; HFXE offers a 50% hedge; OEUH uses a quality and dividend approach, etc. When considering these alternative approaches, bear in mind the geographic and currency-hedge aspects too, if only as a frame of reference for what the “alternative” part of the exposure brings to the table.

Note that our benchmark is unhedged and includes the UK, Switzerland and Sweden, so the scores of many funds will suffer from their basic hedged and/or eurozone-only thesis.

Note too that the length of performance histories vary widely here—EZU has more than a decade under its belt, while roughly half of the segment’s funds launched in 2014 or 2015. Recall also that prior to 2012, HEDJ tracked a completely different index. (Insight updated 06/23/17)

All Funds (32)

99
98.617203
97
97.247051
85
85.045434
78
77.672858
77
77.456197
70
69.873601
66
66.22808
63
62.600219
59
58.794339
54
53.982643
53
53.115556
52
52.320254
44
44.003852
38
37.895281
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
N/A
0
67
67.216951
N/A
0
N/A
0
87
86.863686163141

ETF.com Grade as 06/15/17

Equity: Developed Europe - Total Market