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. The European stock market as represented by the benchmark MSCI Europe Index has significantly underperformed the broader U.S. market in the past year. The index has provided a 1-year trailing total return of 4.1% compared with 18.4% for the S&P 500 as of November 16, 2020.

Key Takeaways

  • The European stock market has underperformed the broader U.S. market in the past year.
  • The ETFs with the best 1-year trailing total returns are EDEN, EWD, and EWN.
  • The top holdings of these ETFs are Novo Nordisk A/S, Telefonaktiebolaget LM Ericsson, and ASML Holding NV, respectively.

There are about 38 Europe ETFs that trade in the U.S., excluding inverse and leveraged funds and those with under $50 million in assets under management (AUM). The best performing Europe ETF, based on 1-year returns, is the iShares MSCI Denmark ETF (EDEN) . Below, we'll look at the best 3 Europe ETFs measured by 1-year trailing total returns. Aside from returns figures above, all data are as of November 17, 2020.

iShares MSCI Denmark ETF (EDEN)

  • 1-Year Trailing Total Return: 37.9%
  • Expense Ratio: 0.53%
  • Annual Dividend Yield: 0.52%
  • 3-Month Average Daily Volume: 31,073
  • Assets Under Management: $134.6 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 industrial companies. It concentrates a large share of its assets in the top 10 holdings. The top three holdings of EDEN are Class B shares of Novo Nordisk A/S (NOVO.B:CSE), the pharmaceutical company; Vestas Wind Systems A/S (VWS:CSE), the wind turbine maker; and Ørsted A/S (ORSTED:CSE), the energy company.

iShares MSCI Sweden ETF (EWD)

  • 1-Year Trailing Total Return: 23.0%
  • Expense Ratio: 0.55%
  • Annual Dividend Yield: 1.34%
  • 3-Month Average Daily Volume: 226,789
  • Assets Under Management: $348.1 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 Class B shares of Telefonaktiebolaget LM Ericsson (ERIC.B:OME), the networking and telecommunications company; Class A shares of Atlas Copco AB (ATCO.A:OME), the industrial manufacturing company; and Class B shares of Volvo AB (VOLV.B:OME), the automobile maker.

iShares MSCI Netherlands ETF (EWN)

  • 1-Year Trailing Total Return: 18.3%
  • Expense Ratio: 0.50%
  • Annual Dividend Yield: 0.86%
  • 3-Month Average Daily Volume: 241,489
  • Assets Under Management: $256.2 million
  • Inception Date: March 12, 1996
  • Issuer: iShares

EWN is a large-clap fund targeting equities that trade on the national stock exchange of the Netherlands. The fund tracks the MSCI Netherlands Investable Market Index, which is comprised of 54 stocks with market values ranging from small cap to large cap.  It is one of the only pure-play options for investors looking for Netherlands exposure through an ETF. The top holdings of EWN include ASML Holding NV (ASML:AMS), the circuit and semiconductor company; Unilever NV (UNA:AMS), the consumer goods company focused on food, personal care, and hygiene products; and Prosus NV (PRX:AMS), the technology and internet investment group.

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