Tuesday, November 4, 2014

Euro View

Following yesterday's post and walk through of how to identify products of interest in Japan, we had some requests to look at the Euro players. With Japan having gone nuclear with its monetary policy, it seems natural that eyes now shift towards the ECB Governing Council meeting this week in Frankfurt which will feature Mario Draghi doing his best to convince you that the ECB will actually attempt something, someday.

Consumer prices have ticked up slightly by .4% in October, core inflation remains significantly below the 2% threshold while EU unemployment remains high at 11.5%.  While the ECB has been reluctant to put the pedal to the metal, we remember the old adage to “buy the rumor and sell the fact.”

So how can we use the ETF scanner to find ways to play the Euro trade?  The ETFG Scanner can help you find the right ETF - start by clicking on the filter and setting Category/Currency/Euro to find all of the ETFs offering straight euro exposure.  Via this currency search for Euro exposure, you can see there are a handful of options available under the “currency ETF” category including the recently added ProShares Short Euro (EUFX) up 8.75% year-to-date.  If that’s not enough to get your blood racing, try the Ultrashort version (EUO) but make sure your heart is healthy enough first.

Reset the scanner and switch from “Geographic Regions” to “Developed Markets” and “Europe” and you’ll find a long list of all products with a European orientation.  Reordering the list to use our ETF Quant rankings you’ll find a truly solid performer at #4 Deutsche X-trackers MSCI Europe Hedged Equity ETF (DBEU).  Besides offering hedged equity exposure, you’ll find it also offers strong momentum.

Thank you for reading ETFG Perspectives.

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