European stocks constitute some of the biggest and best known companies in the world, including Nestlé SA (NESN), Volkswagen AG (VOW3), 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.

Key Takeaways

  • The European stock market has performed on par with the broader U.S. market in the past year.
  • The ETFs with the best 1-year trailing total return are EWD, EIRL, and EWN.
  • The top holdings of these ETFs are class A shares of Atlas Copco AB, CRH PLC, and ASML Holding NV, respectively.

There are 37 Europe ETFs that trade in the U.S., excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). European equities, as measured by the MSCI Europe Index, have matched the performance of the broader market with a total return of 50.1% over the past 12 months compared to the S&P 500's total return of 50.0%, as of May 6, 2021. The best-performing Europe ETF, based on performance over the past year, is the iShares MSCI Sweden ETF (EWD). We examine the top 3 best Europe ETFs below. All numbers below are as of May 10, 2021.

iShares MSCI Sweden ETF (EWD)

  • Performance over 1-Year: 81.3%
  • Expense Ratio: 0.51%
  • Annual Dividend Yield: 0.82%
  • 3-Month Average Daily Volume: 194,103
  • Assets Under Management: $470.1 million
  • Inception Date: March 12, 1996
  • Issuer: iShares

EWD tracks the MSCI Sweden 25/50 Index, which is designed to measure the performance of the large- and mid-cap segments of the Swedish equity market. The ETF provides broad-based exposure to the Swedish economy, but it is heavily tilted towards industrials and financials. The fund follows a blended strategy, investing in a mix of growth and value stocks, and is probably the best option for investors looking for specific exposure to the Swedish market. Its top three holdings include class A shares of Atlas Copco AB (ATCO.A:OME), a manufacturer of industrial tools and equipment; class B shares of Telefonaktiebolaget LM Ericsson (ERIC.B:OME), a multinational networking and telecommunications company; and class B shares of Investor AB (INVE.B:OME), an industrial holding company.

iShares MSCI Ireland ETF (EIRL)

  • Performance over 1-Year: 81.2%
  • Expense Ratio: 0.51%
  • Annual Dividend Yield: 0.42%
  • 3-Month Average Daily Volume: 6,494
  • Assets Under Management: $68.2 million
  • Inception Date: May 5, 2010
  • Issuer: iShares

EIRL tracks the MSCI All Ireland Capped Index, which is designed to gauge the performance of the Ireland equity market. The ETF seeks to provide broad-based exposure to the Irish economy, but companies operating within the materials, consumer discretionary, and industrials sectors make up well over half of the entire portfolio. The fund focuses on value stocks of various market capitalizations. Its top three holdings include CRH PLC (CRG:DUB), a provider of building materials; Flutter Entertainment PLC (FLTR:DUB), a provider of mobile and online gambling services; and class A shares of Kerry Group PLC (KRZ:DUB), an international food company providing taste solutions and ingredients for the food, beverage, and pharmaceutical industries.

iShares MSCI Netherlands ETF (EWN)

  • Performance over 1-Year: 75.5%
  • Expense Ratio: 0.51%
  • Annual Dividend Yield: 0.66%
  • 3-Month Average Daily Volume: 168,375
  • Assets Under Management: $256.4 million
  • Inception Date: March 12, 1996
  • Issuer: iShares

EWN tracks the MSCI Netherlands IMI 25/50 Index, which provides a broad-based performance gauge of the Netherlands equity market. The ETF is comprised of large-cap equities that span a range of sectors that make up the Dutch economy. The fund provides particularly heavy exposure to the information technology (IT) sector. It follows a blended strategy, investing in a mix of value and growth stocks, primarily of large-cap companies. EWN is probably one of the best options for investors looking for pure-play exposure to the Dutch equity market. Its top three holdings include ASML Holding NV (ASML:AMS), a producer of advanced semiconductor equipment; Koninklijke Philips NV (PHIA:AMS), a multinational health technology company; and class N shares of Prosus NV (PRX:AMS), a provider of technology platforms for various products and services.

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