Europe exchange-traded funds (ETFs) are experiencing a renaissance of sorts this year as investors look for alternatives to the lofty valuation multiples being assigned to U.S. equities. Investors considering participation in the Europe ETF market do not need to embrace higher-volatility stocks or lower-quality names to get in on the action. They can even earn income with ETFs such as the O'Shares FTSE Europe Quality Dividend ETF (OEUR).

OEUR, which turns two years old in August, follows the FTSE Developed Europe Qual/Vol/Yield Factor 5% Capped Index. That benchmark "is designed to measure the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in Europe that meet certain requirements for market capitalization, liquidity, high quality, low volatility and dividend yield," according to O'Shares Investments. (See also: Do Low Volatility Smart Beta ETFs Make Sense?)

An oft-cited rub with low-volatility strategies is that, while these funds protect investors on the way down, the emphasis on volatility reduction leads to leaving some money on the table when stocks are soaring. While that is the case on a historical basis across various low-volatility funds, it is hard to quibble with the 16.3 percent year-to-date return offered by OEUR.

Investors should also consider OEUR's attention to the quality factor. Often, the quality factor as it applies to dividend stocks places more merit on a company's ability to continue paying and growing its dividend with less regard for high yields. That works in favor of investors over the long haul because some high-yield dividend payers can have shaky financial positions, while the opposite is true of many consistent dividend growers. In other words, OEUR's dividend yield of 2.5 percent is not overly impressive, but the ETF's holdings can sustain and grow those payouts, traits that are more important than a high yield. (See also: The 5 Best Dividend-Paying ETFs.)

OEUR, which hit record highs on Monday, has a geographic lineup that is familiar to dividend investors experienced with European equities. The U.K. and Switzerland, two of Europe's top dividend growth markets, combine for about 46 percent of the ETF's weight. At 13.7 percent, France is the largest Eurozone weight in OEUR. Overall, the ETF features exposure to 14 countries, nine of which are Eurozone nations.

OEUR's sector allocations are also familiar among dividend-oriented strategies, as consumer staples and healthcare names combine for 44 percent of the ETF's weight. Due to the fact that many of those companies generate revenue in dollars and that OEUR is not a currency-hedged ETF, investors in the fund should favor the current scenario of the dollar being weak against the euro and other developed Europe currencies. (See also: Encouraging Signs From Europe With This ETF.)

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