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Should You Invest in the iShares MSCI Europe Financials ETF (EUFN)?

Sector ETF report for EUFN

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This story originally appeared on Zacks

Launched on 01/20/2010, the iShares MSCI Europe Financials ETF (EUFN) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Broad segment of the equity market.

- Zacks

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.

Index Details

The fund is sponsored by Blackrock. It has amassed assets over $1.77 billion, making it one of the average sized ETFs attempting to match the performance of the Financials - Broad segment of the equity market. EUFN seeks to match the performance of the MSCI Europe Financials Index before fees and expenses.

The MSCI Europe Financials Index is a free float-adjusted market capitalization weighted index designed to measure the combined equity market performance of the financials sector of developed market countries in Europe.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.48%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.30%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Hsbc Holdings Plc (HSBA) accounts for about 6.77% of total assets, followed by Allianz (ALV) and Bnp Paribas Sa (BNP).

The top 10 holdings account for about 38.81% of total assets under management.

Performance and Risk

The ETF has added about 24.63% so far this year and is up about 64.68% in the last one year (as of 11/02/2021). In that past 52-week period, it has traded between $14.06 and $21.33.

The ETF has a beta of 1.19 and standard deviation of 29.69% for the trailing three-year period, making it a medium risk choice in the space. With about 90 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares MSCI Europe Financials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, EUFN is a reasonable option for those seeking exposure to the Financials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

Vanguard Financials ETF (VFH) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. Vanguard Financials ETF has $11.72 billion in assets, Financial Select Sector SPDR ETF has $45.10 billion. VFH has an expense ratio of 0.10% and XLF charges 0.12%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.



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iShares MSCI Europe Financials ETF (EUFN): ETF Research Reports

 

Autoliv, Inc. (ALV): Free Stock Analysis Report

 

Financial Select Sector SPDR ETF (XLF): ETF Research Reports

 

Vanguard Financials ETF (VFH): ETF Research Reports

 

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