Playing Europe’s Rebound
Published on Monday, 13 February 2012 21:13 Written by Todd Shriber
New York, February 13th (TradersHuddle.com) – Well, maybe we should have said Europe’s "potential" rebound because any market observer that doesn’t live in cave knows, Europe’s sovereign debt calamity is far from being solved. The good news is that European policymakers are scheduled to meet in Brussels on Wednesday to finalize another bailout package for Greece and the belief seems to be that if a Greek default can be prevented, that will be enough to keep traders from hammering Italian and Portuguese debt as well.
Searching for an ETF with which to play a possible European rebound isn’t hard at all. Nearly every Euro Zone member has a U.S.-listed ETF devoted to it, but investors looking for a broader, more liquid approach might do well to take a look at the Vanguard MSCI Europe ETF (NYSE: VGK).
To be sure, VGK offers broad swath European exposure. The ETF is home to almost 460 stocks from Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
Yes, that lineup includes every one of the PIIGS, but it should be noted stocks from those countries comprise a relatively small percentage of VGK’s weight. VGK’s top-10 holdings represent almost 23% of the fund’s weight and within that group are some of the European stocks U.S. investors, particularly dividend seekers, will want to consider. Royal Dutch Shell (NYSE: RDS-A), BP (NYSE: BP) and Total (NYSE: TOT), Europe’s three largest oil companies, are all found among VGK’s top-10 lineup as are dividend plays like Nestle (PK: NSRGY), Vodafone (NYSE: VOD) and British American Tobacco (NYSE: BTI).
VGK is up almost 10% year-to-date, but even with that bullish run, investors are still pouring money into the ETF. On Monday, ETF Channel reported VGK saw a $76.2 million dollar week-over-week inflow. That indicates some market participants are betting European stocks have more gains in store and it’s the second week in row in which VGK has experienced net inflows. It may sound trite, but people don’t buy ETFs they think are going to fall, right?
VGK’s chart isn’t perfect, but it’s showing improvement. The ETF is at the very least trading above its 200-day moving average and that area looks like support. From current levels, VGK has some open space to run back to the $48-$50 area before encountering next resistance. From there, a return to the $54-$55 could be in the offing.
Bottom line: VGK’s lineup is littered with blue-chip stocks that have been battered to some extent not because they’re bad companies, but because they’re EUROPEAN companies. That scenario could change for the better if the European Union can convince global investors it has a legitimate plan in place to skirt sovereign debt catastrophe.
The vitals: VGK has an expense ratio of just 0.14% making it cheaper than 92% of comparable ETFs. The fund has $6.1 billion in assets under management, making it one of the largest ETFs tracking Europe.
- Reference Points for BP
- Is BP Closing in to Resistance?
- BP Is Close to Resistance
- Citadel Announces Commencement Of Drilling At Rancho Grande And New Acreage Acquisition
- BP Is Close to Resistance
- BP Broke Resistance
- Critical Alerts For BP, News Corp., Yamana Gold, Align Technology, and Louisiana Pacific Released By InvestorsObserver
- Trading Idea: Entry Levels for BP
- BP is Near a Key Support Area
- Critical Alerts For Gilead, Total SA, Garmin, CIT, and Fortinet Released By InvestorsObserver
Related Partner Headlines
- Total SA Stock Buy Recommendation Reiterated (TOT) - TheStreet.com
- BP Wins Bids for Four Nova Scotia, Canada Deepwater Exploration Blocks - Benzinga
- Greece 10-Year Government Bond Yield 17.577% - Benzinga
- BP Gets Biggest Criminal Fine After Biggest U.S. Oil Spill - TheStreet.com
- Stocks Flat as Jobless Claims Surge, Wal-Mart Misses on Sales - TheStreet.com
- BP Near Settlement on Gulf Disaster: Hot Trends - TheStreet.com
- Stock Futures Rise Ahead of Jobless Claims, Wal-Mart - TheStreet.com
- BP Confirms DoJ Settlement, Includes $4B Paid in Installments - Benzinga
- Stocks to Watch: BP, Wal-Mart, Target, Dell - TheStreet.com
- BP PLC (BP): Today's Featured Basic Materials Laggard - TheStreet.com
Latest Partner Headlines
Dow Today: Verizon Communications (VZ) Higher - TheStreet.com
Separating the Bargains From the Busts - TheStreet.com
Cramer Quick Take: The 60-Inch TV Will Be Key This Holiday - TheStreet.com
Cramer Quick Take: Cisco Wins If Fiscal Cliff Is Resolved - TheStreet.com
Gap Up and Sit - TheStreet.com
Apple, Intel, MicroStrategy: Tech Winners & Losers - TheStreet.com
Windows 8 PC Sales Disappointing: Report - TheStreet.com
Cramer Quick Take: Buy Home Depot and Lowe's - TheStreet.com
Dow JonesCompany ID [INDEXDJX:.DJI] Last trade:15,354.40 Trade time:4:40PM EDT Value change:▲121.18 (0.80%)
S&P 500Company ID [INDEXSP:.INX] Last trade:1,667.47 Trade time:4:39PM EDT Value change:▲17.00 (1.03%)
NASDAQCompany ID [INDEXNASDAQ:.IXIC] Last trade:3,498.97 Trade time:5:15PM EDT Value change:▲33.73 (0.97%)
In The Wires
Rentrak Announces Worldwide Box Office Results for Weekend of May 19, 2013
There is Life After Stroke, Says Book by Jeff Kagan
LA Clippers NBA Apparel on Sale at SportsFanPlayground.com
Prom Dresses Deals For Summer Announced by AmorModa.com
MS Tûranor PlanetSolar Sets World Speed Record for Transatlantic Crossing by Solar Electric Vessel
Zamansky & Associates LLC Announces Its Investigation of Financial Advisor John Pritchard of Raymond James Morgan Keegan And Oppenheimer
HomeThangs.com Introduces A Guide To Choosing A Professional Quality Range Hood
Texas Adds More Jobs Than Any Other State in Country, EmploymentCrossing Finds 185,000 Jobs in State