iShares MSCI Europe Financials ETF (EUFN) was launched on January 20, 2010 and is a passively managed exchange-traded fund designed to provide broad exposure to the Financial-Broad segment of the equity market.
Individual and institutional investors are increasingly turning to passively managed ETFs due to their low cost, transparency, flexibility and tax efficiency, and these types of funds also represent a good investment vehicle for long-term investors.
Sector ETFs are also useful funds, offering a variety of ways to gain low-risk, diversified exposure to a broad group of companies in a particular sector. Financials – Broad is one of 16 Broad Zacks Sectors within the Zacks Industry Classification. It is currently ranked #1, putting it in the top 6%.
Index Details
The fund is sponsored by BlackRock. It has accumulated over $1.99 billion in assets, making it one of the largest ETFs that aims to match the performance of the Financial-Broad segment of the stock market. EUFN aims to match the performance of the MSCI Europe Financial Index before fees and expenses.
The MSCI Europe Financials Index is a free float-adjusted market capitalization weighted index designed to measure the aggregate stock market performance of the financial sector of developed market countries in Europe.
cost
Investors should also pay attention to the expense ratio of an ETF, as all other factors being equal, lower-cost products will perform better than higher-cost ones.
The ETF has annual operating expenses of 0.51%, which is in line with most of its peer products in the space.
The dividend yield over the last 12 months is 4.54%.
Sector Exposure and Major Holdings
ETFs offer diversification that minimizes single-stock risk, but it's important to research a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings daily.
Looking at individual holdings, HSBC Holdings (HSBA) accounts for about 7.76% of total assets, followed by Allianz (ALV) and UBS Group (UBSG).
The total assets held by the top 10 stocks account for approximately 40.99% of total assets under management.
Performance and Risk
Year to date, iShares MSCI Europe Financials ETF has gained about 18.67% so far and about 32.39% over the past 12 months (as of August 26, 2024).EUFN has traded between $17.89 and $24.25 over the past 52 weeks.
The ETF has a trailing three-year beta of 1.11 and a standard deviation of 22.38%, making it a moderate-risk choice in the space. It holds around 92 stocks, effectively diversifying company-specific risk.
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Alternatives
IShares MSCI Europe Financials ETF carries a Zacks ETF Rank #4 (Sell) based on factors such as expected asset class returns, expense ratios and momentum. Therefore, EUFN is not the best choice for investors looking for exposure to the financial ETF segment of the market. Instead, there are better ETFs in this space to consider.
Vanguard Financials ETF (VFH) tracks the MSCI US Investable Market Financials 25/50 Index, while the Financial Select Sector SPDR ETF (XLF) tracks the Financial Select Sector Index. Vanguard Financials ETF has assets of $10.04 billion, while the Financial Select Sector SPDR ETF has assets of $44.01 billion. VFH has an expense ratio of 0.10%, while XLF has an expense ratio of 0.09%.
Conclusion
If you would like to learn more about this or other ETFs, find one to fit your investment objectives, or read about the latest trends in the world of ETF investing, visit the Zacks ETF Center.
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iShares MSCI Europe Financial ETF (EUFN): ETF Research Report
Autoliv Inc. (ALV) : Free Stock Analysis Report
Financial Select Sector SPDR ETF (XLF): ETF Research Report
Vanguard Financials ETF (VFH): ETF Research Report
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