Europe ETFs Grab Value Spotlight

September 13, 2019

The largest Europe equities ETFs have also seen similar spikes in performance in recent days, nearing recent untested highs.

The $5.3 billion iShares MSCI Eurozone ETF (EZU), which invests in countries that use the euro— excluding the U.K., Switzerland and Sweden—is now up 15% year to date. The broader developed Vanguard FTSE Europe ETF (VGK), with $13 billion in assets, is up 14%:

 

Charts courtesy of StockCharts.com

 

That said, ETF investor dollars have yet to follow. For the most part, some of the largest Europe-linked ETFs have been net asset losers this year: 

 

Ticker Fund YTD 2019 Net Flows ($M) 2019 AUM ($M) % of AUM
EZU iShares MSCI Eurozone ETF -1,695.47 5,367.68 -31.59%
VGK Vanguard FTSE Europe ETF -1,222.97 12,891.72 -9.49%
HEDJ WisdomTree Europe Hedged Equity Fund -1,176.79 3,393.32 -34.68%
FFEU Barclays ETN+ FI Enhanced Europe 50 Exchange Traded Notes Series C -801.81 12.60 -6363.12%
FIEE UBS AG FI Enhanced Europe 50 ETN -509.54 27.62 -1844.50%
FEZ SPDR EURO STOXX 50 ETF -466.07 2,167.14 -21.51%
RSX VanEck Vectors Russia ETF -452.88 1,147.40 -39.47%
IEV iShares Europe ETF -433.21 1,648.83 -26.27%
HEZU iShares Currency Hedged MSCI Eurozone ETF -427.01 877.58 -48.66%
EWG iShares MSCI Germany ETF -345.33 2,029.80 -17.01%

 

Asset Gains Very Small

One of the shining exceptions here is the JPMorgan BetaBuilders Europe ETF (BBEU), which has gathered more than $1 billion in net inflows year to date.

BBEU invests in developed European countries, covering about 85% of market cap in the region, for a price tag of just 0.09%. Since it launched just over a year ago, it has grown to a $3.8 billion fund.

J.P. Morgan has been known to bring its own client assets into its proprietary ETFs, so chances are this is in-house asset allocation more than organic, outside-driven demand. And like most of the other net asset gainers this year, it has seen the bulk of its inflows come in the earlier months of 2019, before trade wars and recession talk really took hold this summer.

The list of top net asset gainers is populated mostly by single-country strategies, as seen below, and asset flows in the aggregate have been really small this year: 

 

Ticker Fund YTD 2019 Net Flows ($M) 2019 AUM ($M) % of AUM
BBEU JPMorgan BetaBuilders Europe ETF 1,048.04 3,763.37 27.85%
EWQ iShares MSCI France ETF 594.35 1,225.38 48.50%
EWU iShares MSCI United Kingdom ETF 246.85 2,039.66 12.10%
EWL iShares MSCI Switzerland ETF 45.78 1,048.76 4.37%
FLEE Franklin FTSE Europe ETF 36.98 112.32 32.92%
FXB Invesco CurrencyShares British Pound Sterling Trust 29.10 161.58 18.01%
ERUS iShares MSCI Russia ETF 25.84 647.52 3.99%
HEWU iShares Currency Hedged MSCI United Kingdom ETF 25.42 41.17 61.73%
EPOL iShares MSCI Poland ETF 20.68 270.50 7.65%
GREK Global X MSCI Greece ETF 19.01 335.91 5.66%

Tables source: ETF.com, FactSet Data

 

Contact Cinthia Murphy at [email protected]

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