Exchange Traded Funds (ETFs)

Gain Exposure to Europe With This ETF

The JPMorgan BetaBuilders Europe ETF (BBEU) seeks investment results that closely correspond to the Morningstar Developed Europe Target Market Exposure IndexSM.

The Index is a free-float adjusted market-cap weighted index consisting of stocks that are traded on the primary exchanges in developed countries across Europe. By using a “passive” investment approach, the fund attempts to replicate the Index as closely as possible.

BBEU offers low-cost exposure to developed European countries. The index includes companies in the top 85% of cumulative market capitalization, so small-cap stocks are excluded from coverage — a common concession in the international equity space, though several competing funds reach deeper. Still, a small basket of larger firms means that BBEU is cheaper to manage and allows the fund to charge a low fee relative to its competition.

The exchange-traded fund (ETF) has holdings in developed European countries, with the United Kingdom ranking first with 26.90% of the fund’s assets, France placing second with 17.29%, Switzerland coming in third with 15.31%, Germany finishing fourth with 11.77% and the Netherlands ending up fifth with 5.90%.

Its top holdings are Nestle S.A. (OTCMKTS:NSRGY), Novartis AG (NYSE:NVS), Roche Holdings (OTCMKTS:RHHBY) and HSBC Holdings plc (NYSE:HSBC).

Source: StockCharts.com

This ETF has $3.75 billion in assets under management, a $76.70 billion average weighted market cap and 536 holdings. Its average spread is 0.05% and its expense ratio is 0.09%, meaning it is relatively inexpensive to hold compared to other exchange-traded funds. BBEU currently trades around $23.85. It also pays a rising quarterly dividend, which provided a $0.146 per share payout on Sept. 24, giving it a 3.30% yield.

BBEU has its largest exposure in Financials, Consumer Non-Cyclical, Health Care, Industrials and Consumer Cyclicals sectors. It could be worthwhile for investors looking to gain exposure to those sectors or developed European countries. However, each person should consider his or her own investing goals and, as always, conduct due diligence to decide whether this fund fits the needs of a given individual’s portfolio.

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.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.