Equity: Developed Europe - Total Market

HEUV Top Performer Intra-day
Price $24.27
Today’s Change +0.51%(2.14)
4:00pm 04/28/2017
HGEU Bottom Performer Intra-day
Price $40.94
Today’s Change -0.25%(-0.61)
10:40am 04/28/2017
  • 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 04/28/17)

All Funds (32)

IEUR $2.04 B 2037283400 low fee; solid AUM

A 99
E
98
98
T
87
87
F
99
99

VGK $12.18 B 12180478120.29 Large & liquid

A 97
E
97
97
T
91
91
F
97
97

EZU $10.31 B 10306872820 Eurozone only

A 87
E
91
91
T
89
89
F
87
87

EUMV $24.8 M 24798375 weak asset uptake so far

B 68
E
93
93
T
59
59
F
68
68

DBEU $2.54 B 2539383177.617 Currency-hedged

B 54
E
86
86
T
87
87
F
54
54

DBEZ $58.01 M 58014479.751 Currency-hedged

B 53
E
87
87
T
65
65
F
53
53

HEDJ $9.66 B 9663595110 popular non-vanilla

B 45
E
85
85
T
92
92
F
45
45

FEP $310.53 M 310527207.5059 decent assets

C 82
E
68
68
T
84
84
F
82
82

EUDG $18.17 M 18166725 New launch, high yield

C 76
E
80
80
T
55
55
F
76
76

EDOM $2.69 M 2692387.6912 Bets on homegrown growth

C 67
E
81
81
T
56
56
F
67
67

DDEZ $1.45 M 1445510.6316 N/A

C 66
E
80
80
T
48
48
F
66
66

JPEU $65.33 M 65326351.641128 N/A

D 59
E
74
74
T
57
57
F
59
59

FEUZ $7.46 M 7464460.64386 trades poorly

D 52
E
70
70
T
32
32
F
52
52

HEZU $1.43 B 1429487815 strengthening assets

D 38
E
61
61
T
89
89
F
38
38

EUDV $5.85 M 5845500 consistent dividend growth focus

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

SCID $17.66 M 17664252.418223 competes with SBEU

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

HGEU $4.11 M 4110000 vanilla currency hedged

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

FXEU $6.86 M 6855622.852 currency hedged low volatility

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

DEZU $2.68 M 2676460 N/A

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

OEUH $14.7 M 14697566.7228 new - trade with care

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

GSEU $33.03 M 33028000 N/A

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

HEUV $3.64 M 3639795 N/A

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

DBSE $2.37 M 2367523.675 Developed Southern Europe with FX hedge

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

OEUR $41.86 M 41863873.9222 new - trade with care

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

JPEH $28.38 M 28383456.022706 N/A

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

RFEU $41.6 M 41599361.85498 N/A

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

HFXE $82.12 M 82119318.878 50% currency hedge

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

PTEU $31.23 M 31234000 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 04/20/17

Equity: Developed Europe - Total Market

Performance Dispersion
Performance  [as of 04/27/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: MSCI Europe IMI3.82%8.45%11.69%10.50%-0.11%7.30%--
A 99.450886IEUR2037283400IEURiShares Core MSCI Europe ETF3.74%8.78%12.39%10.52%------
A 97.247051VGK12180478120.29VGKVanguard FTSE Europe ETF4.05%8.97%12.58%10.73%-0.11%7.22%0.75%
A 86.670021EZU10306872820EZUiShares MSCI Eurozone ETF4.40%10.24%13.54%13.61%0.10%8.44%-0.82%
B 68.038339EUMV24798375EUMViShares Edge MSCI Min Vol Europe ETF3.04%10.11%11.67%2.38%------
B 54.285778DBEU2539383177.617DBEUDeutsche X-trackers MSCI Europe Hedged Equity ETF3.10%6.86%8.71%18.63%7.38%----
B 53.400818DBEZ58014479.751DBEZDeutsche X-trackers MSCI Eurozone Hedged Equity ETF4.83%8.97%11.00%20.73%------
B 45.036493HEDJ9663595110HEDJWisdomTree Europe Hedged Equity Fund4.88%11.35%13.18%23.83%10.75%13.10%--
C 81.675703FEP310527207.5059FEPFirst Trust Europe AlphaDEX Fund5.86%10.15%15.95%16.82%0.96%9.20%--
C 75.79309EUDG18166725EUDGWisdomTree Europe Quality Dividend Growth Fund4.77%11.65%15.82%10.43%------
C 66.782268EDOM2692387.6912EDOMWisdomTree Europe Domestic Economy Fund0.60%4.92%9.88%8.02%------
C 65.744403DDEZ1445510.6316DDEZWisdomTree Dynamic Currency Hedged Europe Equity Fund4.32%10.96%10.75%16.48%------
D 58.858469JPEU65326351.641128JPEUJPMorgan Diversified Return Europe Equity ETF3.59%9.93%11.75%7.09%------
D 51.80999FEUZ7464460.64386FEUZFirst Trust Eurozone AlphaDEX ETF4.75%9.28%14.74%19.80%------
D 37.861044HEZU1429487815HEZUiShares Currency Hedged MSCI Eurozone ETF4.40%8.89%10.56%19.97%------
N/A 0EUDV5845500EUDVProShares MSCI Europe Dividend Growers ETF5.85%12.54%12.36%2.25%------
N/A 0SCID17664252.418223SCIDGlobal X Scientific Beta Europe ETF4.82%10.19%13.93%9.78%------
N/A 0HGEU4110000HGEUProShares Hedged FTSE Europe ETF3.31%6.89%9.01%18.49%------
N/A 0FXEU6855622.852FXEUPowerShares Europe Currency Hedged Low Volatility Portfolio4.67%10.08%9.66%10.21%------
N/A 0DEZU2676460DEZUiShares Adaptive Currency Hedged MSCI Eurozone ETF4.98%8.95%--14.03%------
N/A 0OEUH14697566.7228OEUHO'Shares FTSE Europe Quality Dividend Hedged2.84%8.23%9.70%11.98%------
N/A 0GSEU33028000GSEUGoldman Sachs ActiveBeta Europe Equity ETF4.12%9.64%12.74%9.82%------
N/A 0HEUV3639795HEUViShares Edge MSCI Min Vol Europe Currency Hedged ETF0.68%6.59%6.02%6.59%------
N/A 0DBSE2367523.675DBSEDeutsche X-Trackers MSCI Southern Europe Hedged Equity ETF7.38%7.38%14.81%5.76%------
N/A 0OEUR41863873.9222OEURO'Shares FTSE Europe Quality Dividend3.31%10.80%11.88%3.23%------
N/A 0JPEH28383456.022706JPEHJPMorgan Diversified Return Europe Currency Hedged8.56%8.93%--6.12%------
N/A 0RFEU41599361.85498RFEUFirst Trust RiverFront Dynamic Europe4.86%9.70%13.37%17.50%------
N/A 0HFXE82119318.878HFXEIQ 50 Percent Hedged FTSE Europe ETF3.77%7.33%9.96%7.26%------
N/A 0PTEU31234000PTEUPacer Trendpilot European Index ETF4.52%11.44%13.77%9.08%------
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 04/28/17)

All Funds (32)

98
98.465078
97
97.410703
93
92.51702
91
91.242012
87
86.830083
86
86.294475
85
84.706063
81
80.804486
80
80.109478
80
79.743639
74
73.759435
70
70.371377
68
67.999439
61
61.044795
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 04/20/17

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
FEP First Trust Europe AlphaDEX Fund 0.80% -0.70% 0.72% -2.06% 20.00% / 39.60% Low 67.999439
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 70.371377
SCID Global X Scientific Beta Europe ETF 0.38% -- -- -- 20.00% / 39.60% High 0
EDOM WisdomTree Europe Domestic Economy Fund 0.48% -- -- -- 20.00% / 39.60% High 80.804486
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% -0.34% -0.18% -0.53% 20.00% / 39.60% Low 86.294475
HEDJ WisdomTree Europe Hedged Equity Fund 0.58% -0.50% -0.32% -0.97% 20.00% / 39.60% Low 84.706063
VGK Vanguard FTSE Europe ETF 0.10% -0.06% 51.95% -0.12% 20.00% / 39.60% Low 97.410703
DBEZ Deutsche X-trackers MSCI Eurozone Hedged Equity ETF 0.45% -0.05% 0.13% -0.18% 20.00% / 39.60% Low 86.830083
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 73.759435
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% -0.25% 2.84% -3.15% 20.00% / 39.60% Low 61.044795
EUDG WisdomTree Europe Quality Dividend Growth Fund 0.58% -0.33% -0.20% -0.86% 20.00% / 39.60% Medium 80.109478
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% 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% High 0
DDEZ WisdomTree Dynamic Currency Hedged Europe Equity Fund 0.43% -- -- -- 20.00% / 39.60% High 79.743639
EUMV iShares Edge MSCI Min Vol Europe ETF 0.25% 0.03% 0.08% -0.04% 20.00% / 39.60% Medium 92.51702
IEUR iShares Core MSCI Europe ETF 0.10% 0.20% 0.28% 0.12% 20.00% / 39.60% Low 98.465078
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% Low 0
EZU iShares MSCI Eurozone ETF 0.48% -0.07% 0.01% -0.13% 20.00% / 39.60% Low 91.242012
OEUR O'Shares FTSE Europe Quality Dividend 0.58% -- -- -- 20.00% / 39.60% Medium 0
JPEH JPMorgan Diversified Return Europe Currency Hedged 0.49% -- -- -- 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 04/28/17)

All Funds (32)

92
91.543651
91
90.920681
89
89.386436
89
88.521124
87
87.479323
87
86.729769
84
84.194766
65
65.368927
59
58.966409
57
57.451692
56
55.802445
55
55.491036
48
48.068923
32
32.374557
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 04/20/17

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
HEUV iShares Edge MSCI Min Vol Europe Currency Hedged ETF $0 0.64% 0 100.00% 1,003.66% 0.01% None 0
GSEU Goldman Sachs ActiveBeta Europe Equity ETF $25.73 K 0.15% 0.02 31.00% 0.01% 0.22% None 0
HEZU iShares Currency Hedged MSCI Eurozone ETF $17.53 M 0.04% 11.97 100.00% 0.80% 0.01% None 89.386436
JPEH JPMorgan Diversified Return Europe Currency Hedged $0 0.60% 0 100.00% 23,891.00% 0.02% None 0
HFXE IQ 50 Percent Hedged FTSE Europe ETF $20.66 K 0.40% 0.02 31.00% 0.00% 0.33% None 0
RFEU First Trust RiverFront Dynamic Europe $423.01 K 0.42% 0.16 31.00% 0.26% 0.15% None 0
HGEU ProShares Hedged FTSE Europe ETF $23.25 K 0.72% 0.02 31.00% 0.01% 0% None 0
EDOM WisdomTree Europe Domestic Economy Fund $0 0.12% 0 32.00% 0.08% 0.17% None 55.802445
DBEU Deutsche X-trackers MSCI Europe Hedged Equity ETF $26.89 M 0.04% 20.11 31.00% 0.01% 0.27% None 87.479323
IEUR iShares Core MSCI Europe ETF $7.73 M 0.05% 1.77 31.00% 0.02% 0.34% None 86.729769
DBEZ Deutsche X-trackers MSCI Eurozone Hedged Equity ETF $381.89 K 0.13% 0.27 32.00% 0.01% 0.22% None 65.368927
OEUH O'Shares FTSE Europe Quality Dividend Hedged $94.47 K 0.69% 0.07 100.00% 558.78% 0.23% None 0
DBSE Deutsche X-Trackers MSCI Southern Europe Hedged Equity ETF $0 0.14% 0 34.00% 0.04% 0.04% None 0
OEUR O'Shares FTSE Europe Quality Dividend $223.29 K 0.42% 0.19 30.00% 0.02% 0.26% None 0
EUDG WisdomTree Europe Quality Dividend Growth Fund $30.97 K 0.18% 0.03 31.00% 0.03% 0.16% None 55.491036
EUDV ProShares MSCI Europe Dividend Growers ETF $51.74 K 0.57% 0.05 32.00% 0.09% 0.05% None 0
SCID Global X Scientific Beta Europe ETF $28.23 K 0.47% 0.02 31.00% 0.03% 0.88% None 0
EUMV iShares Edge MSCI Min Vol Europe ETF $115.96 K 0.13% 0.10 30.00% 0.04% 0.19% None 58.966409
VGK Vanguard FTSE Europe ETF $155.4 M 0.02% 30.10 31.00% 0.02% 0.10% None 90.920681
EZU iShares MSCI Eurozone ETF $207.85 M 0.03% 57.66 32.00% 0.04% 0.20% None 88.521124
JPEU JPMorgan Diversified Return Europe Equity ETF $17.65 K 0.11% 0.00 30.00% 0.07% 0.11% None 57.451692
FEP First Trust Europe AlphaDEX Fund $1.66 M 0.11% 1.03 30.00% 0.08% 0.25% None 84.194766
FEUZ First Trust Eurozone AlphaDEX ETF $24.09 K 0.90% 0.01 31.00% 0.11% 0.17% None 32.374557
PTEU Pacer Trendpilot European Index ETF $143.01 K 0.46% 0.11 32.00% 0.01% 0.39% None 0
FXEU PowerShares Europe Currency Hedged Low Volatility Portfolio $25.18 K 0.58% 0.02 31.00% 0.14% 0.06% None 0
DDEZ WisdomTree Dynamic Currency Hedged Europe Equity Fund $0 0.39% 0.00 31.00% 0.02% 0.18% None 48.068923
HEDJ WisdomTree Europe Hedged Equity Fund $91.62 M 0.02% 29.85 31.00% 0.07% 0.03% None 91.543651
DEZU iShares Adaptive Currency Hedged MSCI Eurozone ETF $0 0.12% 0 100.00% 0.73% 0.01% None 0
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
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
JPEU
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 04/28/17)

All Funds (32)

99
99.450886
97
97.247051
87
86.670021
82
81.675703
76
75.79309
68
68.038339
67
66.782268
66
65.744403
59
58.858469
54
54.285778
53
53.400818
52
51.80999
45
45.036493
38
37.861044
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 04/20/17

Equity: Developed Europe - Total Market