Top 5 Performing Europe Equity ETFs

The European recovery is supported by quantitative easing and ETF investors can benefit  

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Reviewed by: Emma Smith
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Edited by: Emma Smith

Mario Draghi, president of the European central bank, nonetheless seems keen to expand the amount of quantitative easing, in spite of decent growth.

Azad Zangana, an economist at Schroders, said: “Overall, the latest official growth data from Europe suggests a slowdown in activity, but a reasonably robust and stable recovery.”

European benchmarks have performed strongly over the past year. In terms of exchange-traded funds, which provide low-cost, liquid and diversified exposure to indices, the top performer in the last 12 months has been the UBS ETF MSCI EMU USD Hedged UCITS (Ticker: UC89) returning 22.3 percent.

Small Caps Get Results

Christopher Aldous, a director at Charles Stanley’s Pan Asset team, said the ETF has “good exposure to a number of sectors and range of countries,” but added that the ETF is not hedged.

Following suit is the UBS ETF MSCI EMU Small Cap UCITS (UB69), tracking the same index, but with a slightly lower return of 18.2 percent. The fund has an ongoing charge of 0.33 percent, and fully physically replicates the underlying index, with assets amounting to €36.76 million.

In fourth position is the SPDR MSCI Europe Small UCITS ETF C (EUSC), which has delivered 17 percent over the past 12 months.  With an ongoing charge of 0.30 percent, the fund, which has €57.6 million of assets, physically replicates the index, but optimises by choosing a sample of stocks.  The ETF, which has more than 800 stocks, has its largest weighting the UK at 37 percent with Germany and Italy making up the next largest allocations.

Aldous at Pan Asset said he has owned the UBS ETF for over one year, after beginning to buy hedged European exposure in the first quarter of last year.

“Although Greece seems to have sorted itself out, Portugal is now having a go at rocking the boat,” he said. “There’ll always be something in the wings stopping Europe from achieving full value potential.”