In this article, we look at the 12 best European ETFs to buy. If you want to skip the discussion about the European ETF industry, check out the 5 Best European ETFs to Buy.
The European Central Bank (ECB) is one of the few central banks in developed countries that has been slow to raise interest rates. Inflation in the 20-nation euro zone was 5.2% year-on-year in August 2023, exceeding the ECB’s benchmark interest rate, which reached a record high of 4% in mid-September. In contrast, the US Federal Reserve has kept its benchmark interest rate in the range of 5.25% to 5.50%, with inflation at around 3.7%. Unlike the Fed, the ECB cannot be proactive about raising its base interest rate because rising borrowing costs would hurt economic growth prospects. Germany, well known as Europe’s economic powerhouse, has already experienced economic stagnation in the second quarter of 2023. The German economy slipped into a mild recession last winter, with GDP contracting by 0.4% in the final quarter of 2022 and 0.1% in the final quarter of 2022. Positive GDP growth in France, the eurozone’s second-largest economy, and Spain, its fourth-largest economy, is expected to play a favorable role in the EU, with GDP growth in the second quarter of 2023 The rate is reported to be 0.4%. Given these economic conditions, there is now a strong view that the ECB will halt further increases in the base interest rate and lower it to its target of 2% as a measure to combat inflation.
Investor confidence amid global economic uncertainty
According to independent ETF research and consulting firm EFTGI, net inflows into European ETFs during August 2023 were $8.95 billion, and year-to-date (year-to-date) net inflows were $96.05 billion. Ta. Net inflows into European ETFs in 2023 are currently at the second-highest level after 2021’s peak of $138.94 billion. Specifically, net inflows into European equity ETFs were $5.25 billion, and net inflows into European bonds were $2.97 billion. In contrast, European commodity ETFs experienced net outflows. Interestingly, this is the 11th consecutive month of net inflows into European ETFs, reflecting the current strength and resilience of the European ETF market. This also comes as European companies such as BioNTech SE (NASDAQ:BNTX), Shell plc (NYSE:SHEL), and Stellantis NV (NYSE:STLA) It also reflects investors’ positive outlook on blue-chip stocks.
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Overall, European ETFs’ total assets under management (AUM) reached a record high of $1.57 trillion as of August 2023. ETFGI claims over 2,000 products are listed on 29 exchanges in 24 countries, reflecting the breadth of European ETFs. World wide. According to ETF.com, 71 European ETFs trade on the U.S. stock market. These ETFs primarily focus on stocks and currencies as their primary asset classes. The largest European ETF traded on the U.S. stock market is Vanguard FTSE Europe ETF (NYSEARCA:VGK), with $24.41 billion in assets under management and average daily trading volume of over 2.69 million shares. The ETF was established in May 2000 and has a management fee of 0.11%, an 18% increase over last year.
Another ETF with extensive coverage of the European market is the iShares Core MSCI Europe ETF (NYSEARCA:IEUR). Launched in June 2014, this ETF tracks the MSCI Europe Investable Market Index, which covers small-cap, mid-cap and large-cap stocks across 15 developed European markets. The UK, France and Switzerland are the top three countries with a cumulative share of 56.07% of total assets. This ETF has the highest exposure to the financial sector at 17.15% and can also be used as a benchmark to consider it the best European bank ETF.
Top 12 European ETFs to buy
Photo by Chris Liverani on Unsplash
our methodology
We’ve compiled a short list of the 12 best European ETF stocks for 2023 based on five-year performance. Some of the ETFs listed below are considered among the best index funds in Europe for retail and institutional investors. ETFs are listed in order of best five-year performance as of September 21st.
Best European ETFs to buy
12. WisdomTree German Hedge Stock Fund (NASDAQ:DXGE)
5-year price performance: 17.5%
Total net worth as of September 21, 2023: $19.75 million
Expense ratio: 0.48%
Number of possessions: 58
WisdomTree Germany Hedge Equity Fund (NASDAQ:DXGE) invests in German equities while hedging exposure to fluctuations between the euro and the US dollar. This ETF follows the WisdomTree Germany Hedged Stock Index, which covers over 80% of the German stock market. The top 10 holdings of WisdomTree Germany Hedge Equity Fund (NASDAQ:DXGE) account for 58.81% of total assets, including Mercedes-Benz Group AG (MBG.DE), Allianz SE (ALV.DE), Germany It is made up of major companies such as Telekom AG (DTE). .DE).
11. iShares MSCI Ireland ETF (NYSEARCA:EIRL)
5-year price performance: 20.2%
Total net worth as of September 21, 2023: $98.61 million
Expense rate: 0.50%
Number of possessions: 25
The iShares MSCI Ireland ETF (NYSEARCA:EIRL) provides exposure to the Irish economy and equities with a focus on export-oriented multinational companies across sectors such as industrials, healthcare, and consumer discretionary. This fund has delivered solid returns over the long term. Flutter Entertainment plc (FLTR.IR), CRH plc (NYSE:CRH), Smurfit Kappa Group Plc (SK3.IR), and Kingspan Group plc (KRX.IR) are top of the iShares MSCI Ireland ETF (NYSEARCA:EIRL) There are four constituent stocks. ), accounting for 54.39% of total assets.
10. WisdomTree Europe Hedge Equity Fund (NYSEARCA:HEDJ)
5-year price performance: 24.7%
Total net worth as of September 21, 2023: $1.41 billion
Expense ratio: 0.58%
Number of possessions: 125
WisdomTree Europe Hedge Equity Fund (NYSEARCA:HEDJ) invests in European equities while hedging exposure to fluctuations between the euro and the US dollar. This ETF mimics the WisdomTree Europe Hedged Stock Index and covers approximately 500 large and mid-cap companies from major European stock markets. Stellantis NV (NYSE:STLA), Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), and ASML Holding NV (NASDAQ:ASML) are the top three holdings of the WisdomTree Europe Hedge Equity Fund (NYSEARCA:HEDJ) The total weight is 15.75% of total assets.
9. XTrackers MSCI Europe Hedge Equity ETF (NYSEARCA:DBEU)
5-year price performance: 25.7%
Total net worth as of September 21, 2023: $461.82 million
Expense ratio: 0.45%
Number of possessions: 439
Xtrackers MSCI Europe Hedge Equity ETF (NYSEARCA:DBEU) seeks to replicate the performance of the MSCI Europe USD Hedged Index, which covers over 400 large- and mid-cap stocks across 15 developed markets in Europe. The top three sectors allocated to the ETF are Financial Services, Healthcare, and Industrials, with a cumulative weight of 48.36%. XTrackers MSCI Europe Hedge Equity ETF (NYSEARCA:DBEU) pays semi-annual dividends and offers an attractive yield of 4.22%. The XTrackers MSCI Europe Hedge Equity ETF (NYSEARCA:DBEU) has the second-lowest expense ratio of all ETFs on the Best European ETFs list.
8. iShares MSCI Netherlands ETF (NYSEARCA:EWN)
5-year price performance: 26.6%
Total net worth as of September 21, 2023: $249.12 million
Expense rate: 0.50%
Number of possessions: 56
iShares MSCI Netherlands ETF (NYSEARCA:EWN) provides targeted exposure to Dutch stocks and the Dutch developed economy. This fund is tilted towards sectors such as IT, consumer staples and finance. It has delivered strong risk-adjusted returns over the long term. This ETF tracks the MSCI Netherlands Investable Market Index, which is designed to measure the performance of the Dutch stock market. ASML Holding NV (NASDAQ:ASML), ING Groep NV (0RIC.IL), Prosus NV (PRX.AS), and Wolters Kluwer NV (WKL.AS) are the ETF’s top four holdings with a total weight of 42.23 % is. .
Here’s what ClearBridge Investments said about ASML Holding NV (NASDAQ:ASML) in its Q4 2022 investor letter.
“ASML Holding NV (NASDAQ:ASML) manufactures semiconductor chip manufacturing equipment and is a leading supplier of lithography systems to the semiconductor industry. We expect ASML to deliver better-than-expected growth as the company continues to grow, which should in turn lead to margin expansion and revenue leverage, in addition to tangible growth and profitability drivers relative to Intel. As a semiconductor capital equipment provider, ASML also has a stronger balance sheet and higher return on capital, directly improving the energy efficiency of semiconductor manufacturing, and ASML’s governance and diversity efforts are best in class. .”
7. Franklin FTSE France ETF (NYSEARCA:FLFR)
5-year price performance: 26.7%
Total net worth as of September 21, 2023: $6.15 million
Expense ratio: 0.09%
Number of possessions: 70
The Franklin FTSE France ETF (NYSEARCA:FLFR) tracks the FTSE France RIC Capped Index, which is designed to represent the performance of large and mid-cap French companies. Overall, this ETF has the lowest cost of all the ETFs on our list of best European ETFs. The Franklin FTSE France ETF (NYSEARCA:FLFR) provides exposure to French large- and mid-cap stocks, with a tilt toward export-oriented consumer goods and industrial companies. LVMH Moët Hennessy – Louis Vuitton, Société Europe (MC.PA), Total Energy SE (NYSE:TTE) and Sanofi (SNW.F) are the top three constituents of the fund, with a total weight of 25%.
6. XTrackers MSCI Eurozone Hedge Equity ETF (NYSEARCA:DBEZ)
5-year price performance: 28.1%
Total net worth as of September 21, 2023: $37.86 million
Expense ratio: 0.45%
Number of possessions: 654
Xtrackers MSCI Eurozone Hedge Equity ETF (NYSEARCA:DBEZ) provides exposure to key companies in the Eurozone. This ETF was developed to track the investment results of the MSCI EMU US Dollar Hedged Index. XTrackers MSCI Eurozone Hedge Equity ETF (NYSEARCA:DBEZ) holds over 200 large- and mid-cap stocks across the Eurozone, with stocks from France, Germany, the Netherlands, Spain and Italy leading the way. occupies quota.
In addition to ETFs, European blue-chip stocks such as BioNTech SE (NASDAQ:BNTX), Shell plc (NYSE:SHEL), and Stellantis NV (NYSE:STLA) are also attracting investor attention.
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Disclosure: None. “12 Best European ETFs to Buy” originally appeared on Insider Monkey.
