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VGK, Are European Companies (the baby) being thrown out with the bath water (Sovereigns)?

beebee
edited November 2011 in Fund Discussions
VGK is Vanguard's European ETF. It holds 17% in Financial services companies. It has lost 6% this year. It pays a 12 month dividend of 5.05%. Its capitulated share price back in 2009 was $27. It has bounced around $40 / share more often. Up over 5% today (from $39/share) so far (as of 11:30 est). It has recently sold off 7.5% of its shares which, I assume, is due to investor redemption. This ETF index fund's ER is a razor thin .14%.

Much like US companies, haven't European Global companies been unfairly hurt? Any thoughts?

http://portfolios.morningstar.com/fund/holdings?t=VGK&region=USA

Comments

  • AndyJ
    edited November 2011
    Hi Bee,

    It seems to be in a range - every time it dips below $40, buyers appear.

    It may be good to keep an eye on it (I am), but I seriously doubt the last shoe has fallen on euro banks, and it could get ugly. Plus the austerity approach by the ECB and various euro countries could tip the region back into recession, as several economists are saying.

    Check out M*'s number for fair value, which is only $40 and change. If you think M* etf analysts are even in the ballpark, Vgk is nowhere near a bargain at these levels.

    Good luck, AJ



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