European stocks constitute some of the biggest and best known companies in the world, including Nestlé SA (NESN), Novartis AG (NOVN), and SAP SE (SAP). Investors looking for broad exposure to the European market may consider buying exchange-traded funds (ETFs). Europe-focused ETFs provide diverse exposure to companies in this market, helping to mitigate the risk often associated with investing in individual stocks. There are about 38 Europe ETFs, excluding inverse and leveraged funds as well as those with under $50 million in assets under management. The European stock market as represented by the benchmark MSCI Europe Index has significantly underperformed the broader market in the past year. The Index has provided 1-a year trailing total return of 6.8% compared with 23.9% for the S&P 500 as of August 28, 2020.
- The European stock market has underperformed the broader market in the past year.
- The ETFs with the best 1-year trailing total returns are EDEN, EWD, and FGM.
- The top holdings of these ETFs are Novo Nordisk A/S, Telefonaktiebolaget LM Ericsson, and Hypoport SE, respectively.
The best performing Europe ETF, based on 1-year returns, is the iShares MSCI Denmark ETF (EDEN) . Below, we'll look at the top 3 Europe ETFs as measured by 1-year trailing total returns. Aside from returns figures above, all data are as of September 1, 2020.
- 1-Year Trailing Total Return: 39.0%
- Expense Ratio: 0.53%
- Annual Dividend Yield: 0.56%
- 3-Month Average Daily Volume: 24,847
- Assets Under Management: $108.9 million
- Inception Date: January 25, 2012
- Issuer: iShares
EDEN is the first fund that focused specifically on Danish equities. This large cap growth fund holds about 30 stocks, focused heavily in the health care and industrials. It concentrates about two-thirds of its assets in the top 10 holdings. The top holdings of EDEN are Novo Nordisk A/S (NVO), the pharmaceutical company; DSV Panalpina A/S (DSV), the transport and logistics firm; and Ørsted A/S (ORSTED), the energy company.
- 1-Year Trailing Total Return: 28.0%
- Expense Ratio: 0.55%
- Annual Dividend Yield: 1.43%
- 3-Month Average Daily Volume: 197,070
- Assets Under Management: $247.2 million
- Inception Date: March 12, 1996
- Issuer: iShares
EWD is a large-cap blended fund targeting stocks that trade on Sweden's national stock exchange. The fund tracks the MSCI Sweden Index, which is made up of 36 large-cap and mid-cap stocks. Among the top holdings of EWD are Telefonaktiebolaget LM Ericsson (ERIC), the networking and telecommunications company; Atlas Copco AB (ATCO), the industrial manufacturing company; and Investor AB (IVSBF), the industrial holding company.
- 1-Year Trailing Total Return: 20.5%
- Expense Ratio: 0.80%
- Annual Dividend Yield: 1.04%
- 3-Month Average Daily Volume: 2,737
- Assets Under Management: $80.7 million
- Inception Date: February 14, 2012
- Issuer: First Trust
FGM is a multi-cap blended fund that utilizes the quantitative AlphaDEX methodology to select Germans stocks. The portfolio of about 40 stocks is prioritized according to factors such as recent price appreciation, sales-to-price ratio, and one-year sales performance. The top holdings of FGM include Hypoport SE (HYQ), the technology-based financial services provider; Zalando SE (ZAL), the online apparel company; and United Internet AG (UTDI), the internet services provider.