FEP offers diversified exposure to European equities, using a growth and value factor-based selection, and has outperformed peers and the S&P 500 in 2025. European economic growth is improving, but risks remain from trade tensions, tariffs, and global uncertainty, which could impact future performance. FEP's recent 36% YTD run-up makes it overvalued short-term; I expect a pullback and do not recommend initiating new positions at current levels.
FEP ETF has a high expense ratio (0.80%) and excludes European small-caps. This limits its long-term appreciation potential despite a solid stock selection strategy (AlphaDEX® stock selection methodology). FEP's stock selection results in a low P/E ratio (9x) and reduced concentration risk.