SPDR EURO STOXX 50 ETF (NYSEARCA:FEZ) gives U.S.
If you own the SPDR EURO STOXX 50 ETF (NYSEARCA:FEZ) for income, you've probably noticed something unusual: deposits hitting your brokerage account are wildly uneven.
IEUR and peers draw focus as the Iran crisis jolts Europe, with energy shocks, falling sentiment, and market turmoil pushing investors to reassess ETF exposure.
International equities trade at discounted valuations to U.S. equities. International equities also generally yield more, with some ETFs targeting particularly high-yield stocks in the sector. A quick look at three strong international equity dividend ETFs, with above-average yields and strong recent returns, follows.
After a decade of trailing the S&P 500, European equities are finally having their moment.
For investors seeking momentum, SPDR EURO STOXX 50 ETF FEZ is probably on radar. The fund just hit a 52-week high, and is up 36.6% from its 52-week low of $47.63 per share.
At a year-to-date return of 17.67%, the Vanguard S&P 500 ETF ( NYSE: VOO ) is demonstrating the strength of the US market, with SPDR S&P 500 ETF ( NYSE: SPY ) hot on its heels at 17.56%.
European equities have seen double-digit gains YTD, buoyed by improved sentiment and investor outflows from U.S. markets. FDD and FEZ are two European equity index ETFs benefitting from these trends. FDD is more of an income play, with a 5.1% yield, FEZ a more traditional equity index fund, with greater diversification, lower risk and volatility.
I reiterate my buy rating on FEZ, citing strong performance, reasonable valuation, and favorable risk metrics versus the S&P 500. FEZ benefits from a weak US dollar, robust price momentum, and a 2.5% dividend yield, appealing to both growth and income investors. While seasonality warns of potential August-September weakness, technicals show a solid uptrend and strong support levels for FEZ.
Tariffs, trade wars, and uncertainty have wreaked havoc on U.S. equities. International equities, including European equities, have fared much better in the chaos, seeing strong returns. FEZ invests in 50 of the biggest companies in Europe, trades with a much cheaper valuation than the S&P 500, has solid growth prospects and returns.
I recommend maintaining a "buy" rating for the SPDR EURO STOXX 50 ETF due to Europe's continued relative value compared to US equities. Despite recent gains, large-cap European stocks remain undervalued, offering a discount to US stocks and staying below their long-term average. Positive economic data from Europe, surpassing modest expectations, supports the bullish outlook and suggests stronger corporate profits ahead.
For investors seeking momentum, SPDR EURO STOXX 50 ETF FEZ is probably on the radar. The fund just hit a 52-week high and is up 15.16% from its 52-week low price of $47.11/share.