In a Tough Time for the European Market, Look for Stability with This Fund

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

Beginning this week, we will start our coverage of income-driven dividend funds that reside outside of the United States. O’Shares FTSE Europe Quality Div ETF (OEUR) is one such fund. As its name suggests, OEUR tracks an index that is designed to measure the performance of large- and mid-cap dividend-paying companies that are only listed in Europe. OEUR has high-quality and low-volatility requirements for its picks to reduce its exposure to high-dividend equities that have experienced large price fluctuations.

OEUR’s year-to-date return of 3.91% is worse than the S&P 500’s gain during that time span of 5.87%. However, this is largely due to the uncertain economic climate in Europe this year, caused by factors such as terrorism and the Brexit vote in which U.K. citizens opted to leave the European Union.

This reality is evident in the poor performance of the FTSEurofirst 300 Index, which is the European equivalent of the S&P 500 and which has returned -7.37% year to date. So, OEUR is doing well for a European-based fund.

OEUR is a large fund with almost $36 billion in total assets. Its expense ratio is 0.58% and it has a dividend yield of 3.10%. You can see from the graph below that OEUR has undergone some big ups and downs this year, but these roller coaster rides are slowing down in the most recent month and it looks like the fund is finally stabilizing.


OEUR has a total of 149 holdings. Its top five holdings are Nestle (Switzerland, 5.19%); Novartis (Switzerland, 4.67%); Roche Holdings (Switzerland, 4.62%); British American Tobacco (United Kingdom, 4.29%) and Vodafone Group (United Kingdom, 3.46%).

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If you are seeking a European fund that may have decent upside potential without much worry about the complexities of the European market, I encourage you to take a look at O’Shares FTSE Europe Quality Div ETF (OEUR).

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

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