Top 4 ETFs to Track European Stocks in 2018

Europe offers a multitude of investment opportunities with a number of indexes that can be tracked for European equity exposure. Investors can expect 2018 to be an interesting year for European equities as the U.K. continues its Brexit negotiations with the European Union (EU). Negotiations are on track for a March 2019 separation. Beyond that the U.K.’s negotiations, economic relations and new trade agreements will continue evolving with countries all over the world.

2017 provided some insight on market reactions to Brexit with Eurozone equities taking a lead among ETFs. Below are some top picks for the region in 2018. Investors will likely see continued momentum from EU countries as the euro continues to strengthen and many big businesses move their primary operations to EU countries to maintain business agreements. Some large-cap U.K. companies are also expected to do well as top companies take greater advantage of established business in the U.K.

Note: The funds below were chosen on the basis of performance, assets under management and comprehensive market exposure. Funds do not include leveraged ETFs. All performance figures are as of December 21, 2017 unless otherwise noted.

Issuer: First Trust

Assets under management: $36.5 million

Expense ratio: 0.80%

YTD performance: 35.84%

The First Trust Eurozone AlphaDEX ETF was a top performing fund in 2017. Through December 21, 2017 it had a year-to-date (YTD) return of 35.84%.

The Fund is part of First Trust’s AlphaDEX series and focuses on companies in the Eurozone. This Fund invests in top companies in the Eurozone through a tracker fund approach. It seeks to replicate the holdings and return of the NASDAQ AlphaDEX Eurozone Index which is a rules based index that screens companies for growth and value factors. The resulting Index constituents are some of the best stocks in the Eurozone, all with significant upside potential.

Issuer: First Trust

Assets under management: $686.3 million

Expense ratio: 0.80%

YTD performance: 33.97%

The First Trust Europe AlphaDEX Fund is another fund from First Trust in the AlphaDEX series that also performed well in 2017. This Fund uses the same AlphaDEX rules based methodology to rank stocks by growth and value characteristics. It includes a broader universe in the NASDAQ Europe Index which also encompasses the U.K. As of December 21, 2017, 21.3% of the holdings were in U.K. companies. Its YTD return as of December 21, 2017 was 33.97%.

Issuer: iShares

Assets under management: 15,589.2 million

Expense ratio: 0.48%

YTD performance: 28.03%

The iShares MSCI Eurozone ETF tracks the MSCI EMU Index, which includes large- and mid-cap companies in the Eurozone. It is an index fund that offers broad market exposure to Eurozone companies.

Through December 21, 2017, the Fund had a YTD return of 28.03%. The Fund has 250 holdings with 32.66% of the portfolio in France and 30.01% in Germany.

Issuer: WisdomTree

Assets under management: $54.1 million

Expense ratio: 0.58%

YTD performance: 27.97%

The WisdomTree Europe Quality Dividend Growth Fund was a top performing fund in 2017. The Fund is a tracker fund that seeks to replicate the holdings and performance of the WisdomTree Europe Quality Dividend Growth Index. The Index is customized and managed by WisdomTree. It includes European dividend paying stocks from the WisdomTree International Equity Index. Stocks from the International Equity Index are screened by growth and quality factors. Companies in the Index are fundamentally weighted by annual cash dividend.

The WisdomTree Europe Quality Dividend Growth Fund provides for investment across all of Europe and includes top dividend paying companies with consistent growth prospects. Through December 21, 2017, the Fund had a YTD return of 27.97%. The U.K. reported the largest allocation with 24.44% followed by Switzerland at 17.56% and Germany at 10.97%.