Equity: Developed Europe - Total Market

DBEU Top Performer Intra-day
Price $26.14
Today’s Change 0.00%(0.00)
4:00pm 02/17/2017
DBEU Bottom Performer Intra-day
Price $26.14
Today’s Change 0.00%(0.00)
4:00pm 02/17/2017
  • 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 02/20/17)

All Funds (31)

IEUR $1.11 B 1106204130 low fee; solid AUM

A 99
E
98
98
T
86
86
F
99
99

VGK $10.93 B 10932682887.32 Large & liquid

A 97
E
97
97
T
91
91
F
97
97

EZU $7.71 B 7711701380 Eurozone only

A 85
E
91
91
T
88
88
F
85
85

EUMV $26.3 M 26304960 weak asset uptake so far

B 69
E
93
93
T
60
60
F
69
69

DBEU $2.31 B 2314183026.09 Currency-hedged

B 56
E
86
86
T
87
87
F
56
56

DBEZ $49.46 M 49455027.475 Currency-hedged

B 52
E
86
86
T
67
67
F
52
52

HEDJ $9.02 B 9024963775 popular non-vanilla

B 45
E
85
85
T
92
92
F
45
45

FEP $254.39 M 254394238.04736 decent assets

C 81
E
68
68
T
84
84
F
81
81

EUDG $16.6 M 16599825 New launch, high yield

C 72
E
80
80
T
56
56
F
72
72

EZR $2.43 M 2431777.2672 Bets on homegrown growth

C 68
E
81
81
T
55
55
F
68
68

DDEZ $5.32 M 5316086.3196 N/A

C 66
E
81
81
T
48
48
F
66
66

JPEU $60.47 M 60471695.447046 N/A

D 59
E
73
73
T
57
57
F
59
59

FEUZ $6.86 M 6855372.55304 trades poorly

D 50
E
70
70
T
31
31
F
50
50

HEZU $1.2 B 1203065425 strengthening assets

D 37
E
61
61
T
86
86
F
37
37

HGEU $3.89 M 3893000 vanilla currency hedged

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

FXEU $7.44 M 7438571.253 currency hedged low volatility

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

DEZU $2.46 M 2459820 N/A

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

OEUH $12.61 M 12605325.2106 new - trade with care

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

HEUV $3.42 M 3423375 N/A

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

GSEU $30.69 M 30693500 N/A

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

DBSE $2.11 M 2109421.094 Developed Southern Europe with FX hedge

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

OEUR $34.47 M 34470317.2389 new - trade with care

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

JPEH $26.54 M 26536042.227828 N/A

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

HFXE $29.21 M 29214917.706 50% currency hedge

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

RFEU $27.08 M 27081828.32688 N/A

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

PTEU $24.58 M 24580000 N/A

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

EUDV $5.35 M 5347500 consistent dividend growth focus

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

SCID $15.04 M 15042717.790518 competes with SBEU

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

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 02/16/17

Equity: Developed Europe - Total Market

Performance Dispersion
Performance  [as of 02/17/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: MSCI Europe IMI--------------
A 99.495859IEUR1106204130IEURiShares Core MSCI Europe ETF1.73%8.95%4.06%11.66%------
A 97.247051VGK10932682887.32VGKVanguard FTSE Europe ETF1.79%8.85%4.11%11.65%-2.06%5.25%0.58%
A 85.489408EZU7711701380EZUiShares MSCI Eurozone ETF0.65%8.98%2.86%13.11%-2.59%5.43%-1.00%
B 68.511125EUMV26304960EUMViShares Edge MSCI Min Vol Europe ETF1.90%6.49%3.49%-0.03%------
B 55.866481DBEU2314183026.09DBEUDeutsche X-trackers MSCI Europe Hedged Equity ETF0.77%9.50%2.80%22.85%5.82%----
B 52.406175DBEZ49455027.475DBEZDeutsche X-trackers MSCI Eurozone Hedged Equity ETF0.74%10.56%2.24%23.68%------
B 45.121406HEDJ9024963775HEDJWisdomTree Europe Hedged Equity Fund3.30%10.92%3.55%22.96%8.30%10.85%--
C 81.437247FEP254394238.04736FEPFirst Trust Europe AlphaDEX Fund2.16%10.48%5.47%15.62%-1.99%7.16%--
C 72.375796EUDG16599825EUDGWisdomTree Europe Quality Dividend Growth Fund2.97%10.03%5.60%7.97%------
C 68.214257EZR2431777.2672EZRWisdomTree Europe Local Recovery Fund0.46%6.96%2.23%10.89%------
C 66.202285DDEZ5316086.3196DDEZWisdomTree Dynamic Currency Hedged Europe Equity Fund0.46%8.26%0.27%22.39%------
D 58.917372JPEU60471695.447046JPEUJPMorgan Diversified Return Europe Equity ETF1.83%7.22%2.85%8.38%------
D 50.081199FEUZ6855372.55304FEUZFirst Trust Eurozone AlphaDEX ETF0.71%10.95%3.73%18.23%------
D 36.535002HEZU1203065425HEZUiShares Currency Hedged MSCI Eurozone ETF1.83%9.66%2.37%20.68%------
N/A 0HGEU3893000HGEUProShares Hedged FTSE Europe ETF1.30%9.05%2.66%23.17%------
N/A 0FXEU7438571.253FXEUPowerShares Europe Currency Hedged Low Volatility Portfolio1.56%7.90%1.77%10.27%------
N/A 0DEZU2459820DEZUiShares Adaptive Currency Hedged MSCI Eurozone ETF1.11%8.11%--13.44%------
N/A 0OEUH12605325.2106OEUHO'Shares FTSE Europe Quality Dividend Hedged0.83%7.65%3.16%10.67%------
N/A 0HEUV3423375HEUViShares Edge MSCI Min Vol Europe Currency Hedged ETF0%3.55%1.07%5.25%------
N/A 0GSEU30693500GSEUGoldman Sachs ActiveBeta Europe Equity ETF2.07%8.69%3.86%--------
N/A 0DBSE2109421.094DBSEDeutsche X-Trackers MSCI Southern Europe Hedged Equity ETF0%9.57%6.93%-1.50%------
N/A 0OEUR34470317.2389OEURO'Shares FTSE Europe Quality Dividend2.31%7.09%3.09%2.65%------
N/A 0JPEH26536042.227828JPEHJPMorgan Diversified Return Europe Currency Hedged-0.18%-1.01%----------
N/A 0HFXE29214917.706HFXEIQ 50 Percent Hedged FTSE Europe ETF2.31%2.78%3.56%12.07%------
N/A 0RFEU27081828.32688RFEUFirst Trust RiverFront Dynamic Europe2.20%8.75%3.61%--------
N/A 0PTEU24580000PTEUPacer Trendpilot European Index ETF0.97%9.30%2.80%-1.56%------
N/A 0EUDV5347500EUDVProShares MSCI Europe Dividend Growers ETF1.24%5.38%1.17%1.22%------
N/A 0SCID15042717.790518SCIDGlobal X Scientific Beta Europe ETF2.08%7.76%4.49%13.49%------
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 02/20/17)

All Funds (31)

98
98.463648
97
97.410703
93
92.594548
91
91.174566
86
86.352457
86
86.201716
85
84.503654
81
81.035551
81
80.67626
80
80.105802
73
72.750897
70
70.264671
68
68.166174
61
60.509113
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
N/A
0
N/A
0
61
61.064646205392

ETF.com Grade as 02/16/17

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
RFEU First Trust RiverFront Dynamic Europe 0.83% -- -- -- -- / -- N/A 0
FEUZ First Trust Eurozone AlphaDEX ETF 0.80% -- -- -- 20.00% / 39.60% High 70.264671
SCID Global X Scientific Beta Europe ETF 0.38% -- -- -- 20.00% / 39.60% High 0
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% -0.30% -0.18% -0.53% 20.00% / 39.60% Low 86.201716
HEDJ WisdomTree Europe Hedged Equity Fund 0.58% -0.47% -0.31% -0.97% 20.00% / 39.60% Low 84.503654
VGK Vanguard FTSE Europe ETF 0.12% -0.06% 51.95% -0.12% 20.00% / 39.60% Low 97.410703
DBEZ Deutsche X-trackers MSCI Eurozone Hedged Equity ETF 0.45% -0.06% 0.13% -0.32% 20.00% / 39.60% Low 86.352457
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 72.750897
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% -0.35% 2.84% -3.15% 20.00% / 39.60% Low 60.509113
EUDG WisdomTree Europe Quality Dividend Growth Fund 0.58% -0.36% -0.20% -0.86% 20.00% / 39.60% Medium 80.105802
HFXE IQ 50 Percent Hedged FTSE Europe ETF 0.46% -- -- -- 20.00% / 39.60% High 0
PTEU Pacer Trendpilot European Index ETF 0.65% -- -- -- 20.00% / 39.60% Medium 0
EUDV ProShares MSCI Europe Dividend Growers ETF 0.55% -- -- -- 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 80.67626
EUMV iShares Edge MSCI Min Vol Europe ETF 0.25% 0.03% 0.08% -0.07% 20.00% / 39.60% Low 92.594548
IEUR iShares Core MSCI Europe ETF 0.10% 0.20% 0.28% 0.12% 20.00% / 39.60% Low 98.463648
DEZU iShares Adaptive Currency Hedged MSCI Eurozone ETF 0.51% -- -- -- 20.00% / 39.60% High 0
EZR WisdomTree Europe Local Recovery Fund 0.48% -- -- -- 20.00% / 39.60% High 81.035551
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% Low 0
EZU iShares MSCI Eurozone ETF 0.48% -0.07% 0.01% -0.15% 20.00% / 39.60% Low 91.174566
OEUR O'Shares FTSE Europe Quality Dividend 0.58% -- -- -- 20.00% / 39.60% Medium 0
JPEH JPMorgan Diversified Return Europe Currency Hedged 0.49% -- -- -- -- / -- High 0
FEP First Trust Europe AlphaDEX Fund 0.80% -0.70% 0.72% -2.06% 20.00% / 39.60% Low 68.166174
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 02/20/17)

All Funds (31)

92
91.538862
91
90.920681
88
88.263116
87
87.419759
86
86.022463
86
85.968313
84
84.443119
67
66.822403
60
59.738799
57
57.27141
56
56.015674
55
55.493229
48
48.041695
31
31.304543
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
N/A
0
N/A
0
31
30.736569137242

ETF.com Grade as 02/16/17

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 $119.95 M 0.02% 41.37 31.00% 0.07% 0.03% None 91.538862
DEZU iShares Adaptive Currency Hedged MSCI Eurozone ETF $0 0.12% 0.00 100.00% 0.96% 0.01% None 0
HEUV iShares Edge MSCI Min Vol Europe Currency Hedged ETF $0 0.54% 0.00 100.00% 679.60% 0.01% None 0
GSEU Goldman Sachs ActiveBeta Europe Equity ETF $32.53 K 0.15% 0.02 31.00% 0.01% 0.23% None 0
HEZU iShares Currency Hedged MSCI Eurozone ETF $13.6 M 0.04% 10.16 100.00% 1.07% 0.01% None 86.022463
JPEH JPMorgan Diversified Return Europe Currency Hedged $0 0.67% 0.00 100.00% 15,345.68% 0.02% None 0
HFXE IQ 50 Percent Hedged FTSE Europe ETF $17.18 K 0.61% 0.00 31.00% 0.00% 0.34% None 0
RFEU First Trust RiverFront Dynamic Europe $181.09 K 0.51% 0.07 30.00% 0.18% 0.15% None 0
HGEU ProShares Hedged FTSE Europe ETF $16.55 K 0.54% 0.02 31.00% 0.01% 0% None 0
DBEU Deutsche X-trackers MSCI Europe Hedged Equity ETF $21.23 M 0.04% 16.67 31.00% 0.01% 0.28% None 87.419759
IEUR iShares Core MSCI Europe ETF $6.01 M 0.08% 1.47 31.00% 0.02% 0.36% None 85.968313
DBEZ Deutsche X-trackers MSCI Eurozone Hedged Equity ETF $394.48 K 0.12% 0.29 32.00% 0.01% 0.23% None 66.822403
OEUH O'Shares FTSE Europe Quality Dividend Hedged $178.42 K 0.79% 0.14 100.00% 446.82% 0.24% None 0
DBSE Deutsche X-Trackers MSCI Southern Europe Hedged Equity ETF $0 0.15% 0.00 33.00% 0.04% 0.05% None 0
OEUR O'Shares FTSE Europe Quality Dividend $259.01 K 0.40% 0.24 30.00% 0.02% 0.27% None 0
EUDG WisdomTree Europe Quality Dividend Growth Fund $40.09 K 0.17% 0.04 31.00% 0.03% 0.16% None 56.015674
EUDV ProShares MSCI Europe Dividend Growers ETF $59.52 K 0.55% 0.06 30.00% 0.09% 0.06% None 0
SCID Global X Scientific Beta Europe ETF $42.52 K 0.53% 0.04 31.00% 0.03% 0.91% None 0
EUMV iShares Edge MSCI Min Vol Europe ETF $165.77 K 0.15% 0.16 30.00% 0.04% 0.20% None 59.738799
EZR WisdomTree Europe Local Recovery Fund $0 0.12% 0.00 32.00% 0.10% 0.17% None 55.493229
VGK Vanguard FTSE Europe ETF $137.14 M 0.02% 27.91 31.00% 0.03% 0.10% None 90.920681
EZU iShares MSCI Eurozone ETF $119.07 M 0.03% 34.05 32.00% 0.04% 0.21% None 88.263116
JPEU JPMorgan Diversified Return Europe Equity ETF $16.15 K 0.12% 0.00 30.00% 0.07% 0.12% None 57.27141
FEP First Trust Europe AlphaDEX Fund $1.71 M 0.11% 1.14 30.00% 0.08% 0.26% None 84.443119
FEUZ First Trust Eurozone AlphaDEX ETF $21.92 K 0.97% 0.01 31.00% 0.12% 0.18% None 31.304543
PTEU Pacer Trendpilot European Index ETF $91.17 K 0.95% 0.08 33.00% 0.01% 0.41% None 0
FXEU PowerShares Europe Currency Hedged Low Volatility Portfolio $46.64 K 0.57% 0.04 31.00% 0.16% 0.07% None 0
DDEZ WisdomTree Dynamic Currency Hedged Europe Equity Fund $0 0.39% 0.00 31.00% 0.02% 0.19% None 48.041695
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
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
EZR
5
4
3
2
1
FEUZ
5
4
3
2
1
FXEU
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
HEZU
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
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 02/20/17)

All Funds (31)

99
99.495859
97
97.247051
85
85.489408
81
81.437247
72
72.375796
69
68.511125
68
68.214257
66
66.202285
59
58.917372
56
55.866481
52
52.406175
50
50.081199
45
45.121406
37
36.535002
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
N/A
0
N/A
0
87
86.863686163141

ETF.com Grade as 02/16/17

Equity: Developed Europe - Total Market