Consider Investing in Western Europe and Its Rebound Potential

(Note: First in a series on Europe-focused ETFs)

In our next ETF Talk series, we will highlight a few Europe-based exchange-traded funds (ETFs). European markets have been slumping for years, but the time for those countries to shine again may finally be around the corner as potential investments and renewed growth in European economies is beginning to take off.

SPDR Portfolio Europe ETF (SPEU) is about as close to a pure Western European investment vehicle as you can get, and it includes both large- and small-cap companies, though holdings are weighted by market cap. It is a simple idea aimed at investors who are looking to invest in the region broadly.

Over the last 12 months, this fund is down 6%. This is similar to the performance of other funds with similar investment theses, such as Vanguard FTSE Europe Index Fund (VGK). Western Europe has underperformed American markets over that time period, just as European markets have for years. SPEU holds $137 million in net assets. Its expense ratio is a fair 0.09% and it pays a current 2.36% dividend yield.

Chart courtesy of StockCharts.com

SPEU’s holdings cover a broad swath of industries. Its top holdings, by nation, are the United Kingdom, Switzerland, France, Germany and the Netherlands, though a number of other European countries are represented as well.

The top five largest individual holdings are Nestle SA, 3.36%; Roche Holding AG, 2.50%; Novartis AG, 2.20%; ASML Holding NV, 1.66%; and SAP SE, 1.61%. The top 10 holdings make up 17.5% of SPEU’s portfolio.

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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Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.