Exchange Traded Funds (ETFs)

In a Tough Time for the European Market, Look for Stability with This Fund

Beginning this week, we will start our coverage of income-driven dividend funds that reside outside of the United States. O’Shares FTSE Europe Quality Div ETF (OEUR) is one such fund. As its name suggests, OEUR tracks an index that is designed to measure the performance of large- and mid-cap dividend-paying companies that are only listed in Europe. OEUR has high-quality and low-volatility requirements for its picks to reduce its exposure to high-dividend equities that have experienced large price fluctuations.

OEUR’s year-to-date return of 3.91% is worse than the S&P 500’s gain during that time span of 5.87%. However, this is largely due to the uncertain economic climate in Europe this year, caused by factors such as terrorism and the Brexit vote in which U.K. citizens opted to leave the European Union.

This reality is evident in the poor performance of the FTSEurofirst 300 Index, which is the European equivalent of the S&P 500 and which has returned -7.37% year to date. So, OEUR is doing well for a European-based fund.

OEUR is a large fund with almost $36 billion in total assets. Its expense ratio is 0.58% and it has a dividend yield of 3.10%. You can see from the graph below that OEUR has undergone some big ups and downs this year, but these roller coaster rides are slowing down in the most recent month and it looks like the fund is finally stabilizing.

OEUR has a total of 149 holdings. Its top five holdings are Nestle (Switzerland, 5.19%); Novartis (Switzerland, 4.67%); Roche Holdings (Switzerland, 4.62%); British American Tobacco (United Kingdom, 4.29%) and Vodafone Group (United Kingdom, 3.46%).

If you are seeking a European fund that may have decent upside potential without much worry about the complexities of the European market, I encourage you to take a look at O’Shares FTSE Europe Quality Div ETF (OEUR).

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/