Tag Archives: europe etfs

Investors Reach For Euro ETFs as the US Dollar Recovers

MarketMuse update courtesy of MarketWatch’s 12 March article, “Dollar surge has investors scrambling for a piece of this European ETF”. From the National Swiss Bank’s huge announcement in January to Greece’s continued demise, the European market has seen better days. While the US market continues to recover, the US dollar has almost completely recovered to the being equivalent with the Euro which is making investor grab at Euro ETFs. 

Back in 2008, $1.60 bought one euro EURUSD, -1.10% Fast forward to today, and the U.S. dollar is surging toward parity with the hobbled currency. Just a few more ticks to go.

Of course, the huge currency shake-up is bad news for U.S. exporters but it’s great for investors in the WisdomTree Europe Hedged Equity fund HEDJ, +0.19% And they are throwing gobs of money at it. Read: 4 stock plays that are attracting investor dollars this year.

In the past year alone, $12 billion has flowed into the fund, a more than tenfold increase. The ETF is now the biggest covering Europe with almost $14 billion in assets, according to ETF Database. That’s enough to displace the Vanguard FTSE Europe giant VGK, -0.85% as the region’s top dog.

Olly Ludwig, managing editor for ETF.com, points out that the dollar’s rise has turned a neutral investment into a world beater.

“There’s an elegant mirror-like quality to the chart that isolates the currency factor rather cleanly,” Ludwig said. “Were it not for the currency hedge, HEDJ would be about flat.”

Investors have obviously been taking notice, and currency-hedged ETFs, in general, have seen spikes in asset growth. Ludwig pointed out that, on Monday alone, HEDJ and the WisdomTree Japan Hedged Equity fund DXJ, -0.39% combined to attract $1 billion. In a single day.

For the entire article from MarketWatch, click here.

Not So Bad After All For Europe ETFs

Courtesy of the ETF Professor at Benzinga.com

MarketsMuse extends our warm wishes to all of those celebrating the Jewish New Year and extending  you  “L’Shanah Tovah”

Today’s piece from ETF Professor couldn’t be better timed considering the upcoming (Oct 11)  European Investing & Trading Summit at London’s May Fair Hotel with a special ‘carve-out’ focused on ETF trading and liquidity across the Euro landscape.

Summit Coordinator MarketsMedia advises us at press time that the ETF trading session, hosted by WallachBeth Capital MD Andy McOrmond, is oversubscribed, but additional tix are being made available.

In theory, 2012 should have been a much darker year for ETFs tracking eurozone nations. Headlines have included speculation about Greece’s imminent departure from the eurozone, the need for a massive bailout of Spanish banks and Italy not being far behind in the bailout buffet line.

Then there are these facts. Italy is mired in a recession. Spain’s unemployment rate is over 20 percent and Greece could make the ominous switch to emerging market from developed market status.

Those are just a few of the issues Europe ETFs have had to deal with in 2012. Apparently, markets are not all that logical because while many global investors have anointed U.S. equities the toast of the developed world because the SPDR S&P 500 SPY -0.42% is up 16 percent year-to-date, some eurozone ETFs are doing quite well, too.

iShares MSCI France Index Fund EWQ -1.57%

France departed the AAA credit rating club earlier this year, but the CAC 40 Index has posted a gain of 11.2 percent year-to-date. The iShares MSCI France Index Fund has been even better with a gain of nearly 13 percent. A large part of the reason for EWQ’s good fortune is that many of its components derive the bulk of their revenue from outside the eurozone.

For example, Total TOT -1.56% and Sanofi SNY -1.40% account for about 22 percent of EWQ’s weight and neither is eurozone dependent. EWQ needs to move above $22.65 to confirm another breakout.

iShares MSCI Belgium Investable Market Index Fund EWK -0.94%

Belgium is another surprise eurozone winner this year, particularly because the country endured some ratings downgrades in late 2011. In fact, 2011 was so rough on EWK it was outperformed by the iShares MSCI Spain Index Fund EWP -2.96% and the iShares S&P Europe 350 Index Fund IEV -1.28% . Continue reading

European Institutions Adding ETFs


European institutional investors primarily use exchange-traded products as beta tools or to implement asset allocation strategies, with few investors seeing demand for active ETFs, according to an EDHEC-Risk Institute survey released Tuesday.

About 70% of the 174 European institutional managers and private wealth managers who responded to the survey said they primarily use ETFs to gain broad market exposures. About 56% use ETFs for buy-and-hold investments, while 54% use ETFs to gain short-term or dynamic asset allocation exposures.

“There is an increasing demand for short-term dynamic strategies and subsegment exposures,” according to EDHEC’s European ETF Survey 2011, which was conducted from June through August and is also supported by Amundi ETF, an ETF manager. About 74% of the respondents were institutional money managers.

Separately, about 77% said ETFs should remain beta-replicating products and only 11% believed more active ETFs are needed. About 39% would like to see more ETFs that track niche markets.

Emerging markets equity and bonds were in demand, “which may be somewhat related to the recognition that many of the sovereign debt problems investors face in developed markets can be somewhat mitigated by emerging markets bond investments,” according to survey’s accompanying report. Other types of ETFs on the wish list include volatility, commodity and high-yield bond ETFs.

“Investors expect to use ETFs more for portfolio optimization and risk-management strategies,” according to the report of the survey.

In Europe, ETF assets under management totaled about $273.5 billion at the end of 2011, with about 90% being used by institutions, according to data from BlackRock and EDHEC.