Should You Invest in the iShares MSCI Europe Financials ETF (EUFN)?
Sector ETF report for EUFN
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.
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.
Sector ETFs are also funds of convenience, offering many ways 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%.
The fund is sponsored by Blackrock. It has amassed assets over $1.63 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.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 4.11%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Hsbc Holdings Plc (HSBA) accounts for about 6.72% of total assets, followed by Allianz (ALV) and Bnp Paribas Sa (BNP).
The top 10 holdings account for about 38.91% of total assets under management.
Performance and Risk
The ETF has added about 0% and is up about 20.20% so far this year and in the past one year (as of 01/04/2022), respectively. EUFN has traded between $16.82 and $21.47 during this last 52-week period.
The ETF has a beta of 1.21 and standard deviation of 29.51% for the trailing three-year period, making it a medium risk choice in the space. With about 89 holdings, it effectively diversifies company-specific risk.
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 good 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 $11.73 billion in assets, Financial Select Sector SPDR ETF has $45.26 billion. VFH has an expense ratio of 0.10% and XLF charges 0.12%.
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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