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European ETF's/Funds

edited February 2015 in Fund Discussions
European shares have outperformed US markets over the past month, especially since Draghi announced the new stimulus.

1. Do MFO posters think this outperformance will continue?

2. I've looked at 2 Eurofocused small cap ETF's - IEUS & DFE. I'd welcome other suggestions for ETF's and for funds. As of now I would consider this investment to be a small portion of my portfolio, but if the momentum continues then I may make this a larger part of my portfolio. Time will tell...

Thanks in advance for any and all replies!


  • Hi there PopTart- been quite a while since we've talked! Not sure if Pear Tree Polaris Foreign Value Small Cap Fund Ordinary Class QUSOX meets your requirements, but David Snowball believes it to be one of the three best funds of this type. Not completely Europe, but a fair amount.

    Some of the major holdings:

    Japan 15.29%
    United Kingdom 14.95%
    India 7.59%
    Germany 6.83%
    Thailand 6.36%
    Hong Kong 5.58%
    China 4.92%
    Norway 4.90%
    Ireland 4.60%
    Sweden 4.40%

    I''m thinking of putting some money there, so be warned: that probably will result in the fund immediately plummeting to the bottom of the class.

    Here's a link to Schwab's info site, which I find to be pretty good. Hope that you find this info helpful.

    Regards- OJ
  • Hi OJ - Thanks for the suggestion, I'll look into it tomorrow when I have some time.

    I've made a few posts recently but mostly lurk. I hope that all is well!
  • Hi Pop Tart,

    With the ECB in QE mode and the US Fed to start raising interest rates sooner than later, I am confident that the Euro will continue to weaken relative to the USD. So you may want to consider currency-hedged ETFs like HEDJ and DBEU. The currency trend may reverse, so it is always a good idea to have an exit plan, and for me that involves following the 20/50/100EMAs.

    I would also take a look at MEURX, a relatively low volatility multi-cap value with an attractive long-term track record. This fund continues to be available in Wellstrade retirement accounts for a $250 minimum per test trade.

    Another multi-cap fund to consider would be PRESX, which has a solid track record and continues to perform in 2015.


  • Evermore global value EVGIX is managed by David Marcus formerly at mutual series. It is 55 percent eurozone, overweight financials, overweight industrials, overweight real estate , underweight healthcare, underweight technology (as compared to world stock).

    Performance has not looked good, but it is small ish cap, independent and concentrated. The er is high and I wouldn't consider unless you have access to load waived. I don't think you can get lw at fido without a million bucks. Check out the MFO profile in April of 2014. FWIW
  • Thank you for the suggestions, I'll take a look at all of them. I'm not certain yet if I'll include any of these suggestions in my portfolio, but the replies are all most welcome. Thanks Ted for the illuminating link, I missed this article. Makes me reconsider my European equity idea...
  • Foriegn SC funds (other than QUSOX):


    World Allocation:
  • edited February 2015
    Old_Joe said:

    Not sure if Pear Tree Polaris Foreign Value Small Cap Fund Ordinary Class QUSOX meets your requirements, but David Snowball believes it to be one of the three best funds of this type. Not completely Europe, but a fair amount.
    Regards- OJ

    OJ, thanks for pointing out the geography of QUSOX. One thing that sets Horn/Polaris apart is their usually not-insignificant stake in Scandinavia. -- Cheers, AJ
  • Hi Pop Tart,

    Like kevindow I think we're just at the beginning of QE for Europe, I think it will continue for a long time and I think the Euro will weaken and European stocks will do well all along the way. My preference is HEDJ because they only hold Euro area stocks that derive more than 50% of revenue outside of the Euro area, meaning their businesses benefit not only from the weak currency but as well from the multiple expansion.

    IMHO, Europe has pretty big problems. They have mostly bad demographics, the ECB has been clear they need reform in addition to QE and they have strong nationalistic interests that make creating real and sustainable growth easier said than done. Greece is a timely example. They can't live with austerity now because they need to stimulate the economy, but without serious reform the rest of Europe (and in large part the Germans) just end up subsidizing their problems. QE is going to help exporters, it will help anything related to tourism and it will feed multiple expansion, but without real fiscal changes the problems aren't going away. Since I don't believe there will be real reform anytime soon, I think QE will have to continue and the Euro will devalue until someone manages the political capital to push real change.
  • edited February 2015
    Many thanks once again for the informative replies to my post! I'll watch all of the suggestions for awhile, although I have to admit that the case for HEDJ is perhaps most compelling.

    Thanks to all for the help!
  • Fund Managers Bullish on Europe's QE

    I would also take a look at MINIX and OSMYX, which both have over a 60% exposure to Europe. As disclosure, we own HEDJ in the Euro space.


  • I'm curious as to why the focus on small caps in Europe versus a multi-cap type fund? Someone mentioned PRESX which has a good record. I would not overlook that or any other fund that has done well.

    If the OP already has international equity funds then that exposure to Europe has to be considered as to not overweight the portfolio in one region. I understand that most international funds and even Europe focused funds have the usual suspects for holdings like Siemens, BMW, etc. This would be a chance to get into different caps.

    I do not see any end to this saga of QE and Grexit rumours. It has been going on for some time now with the occasional promising agreements only to fade back into the fears of default once again. Until Greece changes their ways then there will be no success. This, in turn is a dark cloud over the whole Euro experiment.
  • I agree that the big decision is to hedge or not to hedge. One problem is that many great minds are trying to make a decision and its not clear cut particularly since hedging has an impact on the expense ratio..I am certainly not an expert on macro economics so to have the fewest regrets read articles and posts on sites like this one and decide who has the best reasoning. .That way if you are wrong you will have the fewest regrets as you will have backed the horse you wanted to for good reasons
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