Equity: Developed Europe - Total Market

HFXE Top Performer Intra-day
Price $19.28
Today’s Change +0.10%(0.50)
3:51pm 08/18/2017
HGEU Bottom Performer Intra-day
Price $40.67
Today’s Change -0.27%(-0.66)
3:48pm 08/18/2017
  • 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 08/18/17)

All Funds (32)

IEUR $3.09 B 3093345160 low fee; solid AUM

A 98
E
99
99
T
87
87
F
98
98

VGK $17.13 B 17126674102.72 Large & liquid

A 97
E
98
98
T
91
91
F
97
97

EZU $13.31 B 13306165600 Eurozone only

A 72
E
91
91
T
89
89
F
72
72

EUMV $36.05 M 36050625 weak asset uptake so far

B 64
E
90
90
T
61
61
F
64
64

DBEU $2.45 B 2449688527.79 Currency-hedged

B 48
E
86
86
T
88
88
F
48
48

HEDJ $8.83 B 8826750950 popular non-vanilla

B 44
E
84
84
T
92
92
F
44
44

FEP $536.67 M 536665832.5224 decent assets

C 78
E
67
67
T
84
84
F
78
78

EUDG $35.76 M 35760760 New launch, high yield

C 71
E
79
79
T
58
58
F
71
71

DDEZ $3.04 M 3042741.7048 N/A

C 59
E
79
79
T
49
49
F
59
59

EDOM $5.89 M 5886777.7332 Bets on homegrown growth

C 59
E
80
80
T
58
58
F
59
59

DBEZ $59.27 M 59266029.633 Currency-hedged

C 47
E
85
85
T
64
64
F
47
47

JPEU $70.41 M 70407376.202816 N/A

D 59
E
73
73
T
60
60
F
59
59

HEZU $1.78 B 1783904490 strengthening assets

D 44
E
61
61
T
89
89
F
44
44

FEUZ $12.28 M 12280188.86738 trades poorly

D 42
E
68
68
T
40
40
F
42
42

DEZU $2.78 M 2780660 N/A

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

OEUH $17.48 M 17482855 new - trade with care

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

HEUV $3.67 M 3670365 N/A

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

GSEU $43.88 M 43877000 N/A

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

OEUR $66.09 M 66089410 new - trade with care

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

DBSE $2.4 M 2404424.044 Developed Southern Europe with FX hedge

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

JPEH $29.08 M 29075970.132017 N/A

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

HFXE $153.51 M 153512819.432 50% currency hedge

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

RFEU $84.73 M 84727880.5226 N/A

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

PTEU $45.52 M 45523500 N/A

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

SCID $20.47 M 20465816.54938 competes with SBEU

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

EUDV $9.1 M 9096750 consistent dividend growth focus

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

HGEU $5.16 M 5161250 vanilla currency hedged

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

FXEU $5.78 M 5784523.138 currency hedged low volatility

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 08/10/17

Equity: Developed Europe - Total Market

Performance Dispersion
Performance  [as of 08/17/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: MSCI Europe IMI--------------
A 98.02567IEUR3093345160IEURiShares Core MSCI Europe ETF-0.67%2.32%18.64%17.88%2.94%----
A 96.899172VGK17126674102.72VGKVanguard FTSE Europe ETF-0.64%2.37%18.92%17.57%2.62%8.39%1.96%
A 72.043507EZU13306165600EZUiShares MSCI Eurozone ETF-0.04%3.29%21.38%22.68%4.41%10.08%0.54%
B 63.624196EUMV36050625EUMViShares Edge MSCI Min Vol Europe ETF-0.30%2.02%19.13%8.93%3.09%----
B 48.403597DBEU2449688527.79DBEUDeutsche X-trackers MSCI Europe Hedged Equity ETF-1.40%-0.70%9.63%16.00%7.94%----
B 43.786679HEDJ8826750950HEDJWisdomTree Europe Hedged Equity Fund-2.54%-3.05%9.81%18.62%9.97%12.07%--
C 77.604765FEP536665832.5224FEPFirst Trust Europe AlphaDEX Fund-0.20%4.42%24.19%24.59%6.13%11.98%--
C 71.019302EUDG35760760EUDGWisdomTree Europe Quality Dividend Growth Fund0.08%2.58%22.40%15.81%4.24%----
C 59.182162DDEZ3042741.7048DDEZWisdomTree Dynamic Currency Hedged Europe Equity Fund2.12%0.98%16.80%23.40%------
C 58.869174EDOM5886777.7332EDOMWisdomTree Europe Domestic Economy Fund1.21%6.46%28.23%33.47%------
C 46.528861DBEZ59266029.633DBEZDeutsche X-trackers MSCI Eurozone Hedged Equity ETF-1.65%-0.96%11.04%20.76%------
D 58.681255JPEU70407376.202816JPEUJPMorgan Diversified Return Europe Equity ETF0.09%2.98%19.34%13.58%------
D 44.013201HEZU1783904490HEZUiShares Currency Hedged MSCI Eurozone ETF-1.97%-1.26%10.32%20.00%------
D 42.094565FEUZ12280188.86738FEUZFirst Trust Eurozone AlphaDEX ETF1.22%6.91%26.80%28.88%------
N/A 0DEZU2780660DEZUiShares Adaptive Currency Hedged MSCI Eurozone ETF2.29%1.26%--20.42%------
N/A 0OEUH17482855OEUHO'Shares FTSE Europe Quality Dividend Hedged-2.18%-1.94%9.51%5.68%------
N/A 0GSEU43877000GSEUGoldman Sachs ActiveBeta Europe Equity ETF-0.28%2.69%19.70%16.63%------
N/A 0HEUV3670365HEUViShares Edge MSCI Min Vol Europe Currency Hedged ETF-0.19%-1.74%11.07%7.18%------
N/A 0DBSE2404424.044DBSEDeutsche X-Trackers MSCI Southern Europe Hedged Equity ETF0%%-1.58%13.00%21.24%------
N/A 0OEUR66089410OEURO'Shares FTSE Europe Quality Dividend-0.94%0.75%16.76%6.64%------
N/A 0JPEH29075970.132017JPEHJPMorgan Diversified Return Europe Currency Hedged-0.43%-0.07%--10.44%------
N/A 0RFEU84727880.5226RFEUFirst Trust RiverFront Dynamic Europe-1.07%2.76%20.05%22.60%------
N/A 0HFXE153512819.432HFXEIQ 50 Percent Hedged FTSE Europe ETF-1.64%0.37%13.05%8.41%------
N/A 0PTEU45523500PTEUPacer Trendpilot European Index ETF0.84%4.27%22.83%26.02%------
N/A 0EUDV9096750EUDVProShares MSCI Europe Dividend Growers ETF-0.58%0.07%15.49%5.20%------
N/A 0SCID20465816.54938SCIDGlobal X Scientific Beta Europe ETF0.49%4.59%23.60%20.26%------
N/A 0HGEU5161250HGEUProShares Hedged FTSE Europe ETF-1.34%-0.91%10.14%14.92%------
N/A 0FXEU5784523.138FXEUPowerShares Europe Currency Hedged Low Volatility Portfolio-0.38%-0.07%12.74%13.15%------
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 08/18/17)

All Funds (32)

99
98.557008
98
97.720202
91
91.12772
90
89.534901
86
86.258188
85
84.975333
84
84.445079
80
79.976135
79
79.259156
79
79.187992
73
73.311655
68
67.703187
67
67.436367
61
61.131707
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 08/10/17

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
DBEU Deutsche X-trackers MSCI Europe Hedged Equity ETF 0.45% -0.44% -0.24% -0.55% 20.00% / 39.60% Low 86.258188
HEDJ WisdomTree Europe Hedged Equity Fund 0.58% -0.80% -0.46% -1.14% 20.00% / 39.60% Low 84.445079
VGK Vanguard FTSE Europe ETF 0.10% 0.04% 0.18% -0.05% 20.00% / 39.60% Low 97.720202
DBEZ Deutsche X-trackers MSCI Eurozone Hedged Equity ETF 0.45% -0.05% 0.13% -0.18% 20.00% / 39.60% Medium 84.975333
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 73.311655
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% -0.17% 3.32% -2.50% 20.00% / 39.60% Low 61.131707
EUDG WisdomTree Europe Quality Dividend Growth Fund 0.58% -0.35% 0.23% -0.69% 20.00% / 39.60% High 79.187992
HFXE IQ 50 Percent Hedged FTSE Europe ETF 0.30% -- -- -- 20.00% / 39.60% Low 0
PTEU Pacer Trendpilot European Index ETF 0.65% -- -- -- 20.00% / 39.60% Low 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% Closing 0
DDEZ WisdomTree Dynamic Currency Hedged Europe Equity Fund 0.43% -0.06% 0.47% -0.20% 20.00% / 39.60% High 79.259156
EUMV iShares Edge MSCI Min Vol Europe ETF 0.25% 0.02% 0.08% -0.12% 20.00% / 39.60% High 89.534901
IEUR iShares Core MSCI Europe ETF 0.10% 0.17% 0.22% 0.06% 20.00% / 39.60% Low 98.557008
DEZU iShares Adaptive Currency Hedged MSCI Eurozone ETF 0.51% -- -- -- 20.00% / 39.60% High 0
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 91.12772
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 67.436367
RFEU First Trust RiverFront Dynamic Europe 0.83% -- -- -- 20.00% / 39.60% Low 0
FEUZ First Trust Eurozone AlphaDEX ETF 0.80% -1.68% -0.25% -3.22% 20.00% / 39.60% High 67.703187
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% 0.26% -0.34% 20.00% / 39.60% High 79.976135
FXEU PowerShares Europe Currency Hedged Low Volatility Portfolio 0.25% -- -- -- 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 08/18/17)

All Funds (32)

92
91.536966
91
90.90548
89
89.440575
89
89.000817
88
87.530173
87
87.048209
84
84.175636
64
64.155829
61
60.864793
60
59.575197
58
58.253433
58
57.852007
49
49.362424
40
40.046071
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 08/10/17

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
IEUR iShares Core MSCI Europe ETF $9.58 M 0.04% 2.02 30.00% 0.02% 0.31% None 87.048209
DBEU Deutsche X-trackers MSCI Europe Hedged Equity ETF $23.22 M 0.04% 16.67 31.00% 0.01% 0.26% None 87.530173
OEUH O'Shares FTSE Europe Quality Dividend Hedged $92.4 K 1.56% 0.07 100.00% 207.91% 0.22% None 0
DBEZ Deutsche X-trackers MSCI Eurozone Hedged Equity ETF $289.86 K 0.10% 0.19 32.00% 0.01% 0.22% None 64.155829
OEUR O'Shares FTSE Europe Quality Dividend $525.66 K 0.45% 0.42 30.00% 0.02% 0.24% None 0
DBSE Deutsche X-Trackers MSCI Southern Europe Hedged Equity ETF $0 0.13% 0 34.00% 0.04% 0.04% None 0
EUDG WisdomTree Europe Quality Dividend Growth Fund $103.34 K 0.18% 0.08 30.00% 0.04% 0.14% None 58.253433
SCID Global X Scientific Beta Europe ETF $22.57 K 0.55% 0.02 30.00% 0.03% 0.77% None 0
EUDV ProShares MSCI Europe Dividend Growers ETF $23.03 K 0.91% 0.02 30.00% 0.19% 0.05% None 0
EUMV iShares Edge MSCI Min Vol Europe ETF $192.64 K 0.14% 0.16 29.00% 0.04% 0.18% None 60.864793
VGK Vanguard FTSE Europe ETF $201.83 M 0.02% 35.88 30.00% 0.15% 0.09% None 90.90548
JPEU JPMorgan Diversified Return Europe Equity ETF $72.14 K 0.10% 0.01 30.00% 0.07% 0.10% None 59.575197
EZU iShares MSCI Eurozone ETF $219.72 M 0.02% 54.15 32.00% 0.03% 0.18% None 89.000817
FEP First Trust Europe AlphaDEX Fund $3.51 M 0.13% 2.03 30.00% 0.09% 0.22% None 84.175636
PTEU Pacer Trendpilot European Index ETF $254.24 K 0.52% 0.17 51.00% 0.09% 0.34% None 0
FEUZ First Trust Eurozone AlphaDEX ETF $122.95 K 0.75% 0.06 30.00% 0.13% 0.15% None 40.046071
DDEZ WisdomTree Dynamic Currency Hedged Europe Equity Fund $6.52 K 0.36% 0.00 31.00% 0.02% 0.16% None 49.362424
FXEU PowerShares Europe Currency Hedged Low Volatility Portfolio $26.87 K 0.43% 0.02 31.00% 0.19% 0.06% None 0
HEDJ WisdomTree Europe Hedged Equity Fund $82.28 M 0.02% 25.83 31.00% 0.06% 0.03% None 91.536966
DEZU iShares Adaptive Currency Hedged MSCI Eurozone ETF $6.92 K 0.11% 0.00 100.00% 0.58% 0.01% None 0
HEUV iShares Edge MSCI Min Vol Europe Currency Hedged ETF $0 0.67% 0 100.00% 626.78% 0.01% None 0
GSEU Goldman Sachs ActiveBeta Europe Equity ETF $82.53 K 0.13% 0.05 31.00% 0.01% 0.20% None 0
HEZU iShares Currency Hedged MSCI Eurozone ETF $24.9 M 0.03% 16.46 100.00% 0.61% 0.01% None 89.440575
JPEH JPMorgan Diversified Return Europe Currency Hedged $3.23 K 0.57% 0.00 100.00% 1,846.94% 0.02% None 0
HFXE IQ 50 Percent Hedged FTSE Europe ETF $90.88 K 0.30% 0.09 30.00% 0.00% 0.31% None 0
RFEU First Trust RiverFront Dynamic Europe $616.14 K 0.25% 0.20 30.00% 1.50% 0.13% None 0
HGEU ProShares Hedged FTSE Europe ETF $25.86 K 0.87% 0.02 30.00% 0.01% 0%% None 0
EDOM WisdomTree Europe Domestic Economy Fund $59.62 K 0.11% 0.04 32.00% 0.10% 0.14% None 57.852007
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

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
VGK
5
4
3
2
1
DBEZ
5
4
3
2
1
DBSE
5
4
3
2
1
EUDG
5
4
3
2
1
EUMV
5
4
3
2
1
FEUZ
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
JPEU
5
4
3
2
1
PTEU
5
4
3
2
1
DDEZ
5
4
3
2
1
GSEU
5
4
3
2
1
EDOM
5
4
3
2
1
EUDV
5
4
3
2
1
FXEU
5
4
3
2
1
DEZU
5
4
3
2
1
RFEU
5
4
3
2
1
HEUV
5
4
3
2
1
OEUH
5
4
3
2
1
JPEH
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 08/18/17)

All Funds (32)

98
98.02567
97
96.899172
78
77.604765
72
72.043507
71
71.019302
64
63.624196
59
59.182162
59
58.869174
59
58.681255
48
48.403597
47
46.528861
44
44.013201
44
43.786679
42
42.094565
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 08/10/17

Equity: Developed Europe - Total Market