Institutional investors are betting bigger on Europe

Aug. 22, 2020 4:20 PM ETVanguard FTSE Europe ETF (VGK)EWG, VGK, FEZ, EWU, EZU, HEDJ, IEUR, BBEUBy: SA Eli Hoffmann, SA News Editor16 Comments
  • There's lots of enthusiasm for Europe equities, according to a Bloomberg article this weekend.
  • A recent Bank of America survey of fund managers found Europe is now the most-favored region. And investors exposure to euro-area equities is the greatest it's been in two years. To wit: Vanguard's FTSE Europe ETF (NYSEARCA:VGK) drew in almost $500M in August.
  • Still, note that the exuberance hasn't yet led to outperformance. While U.S. and Asia equities have rallied near records, the EuroStoxx 600 Index is still 15% short from its pre-pandemic highs.
  • “There is a perception that Europe on the whole has done a better job managing the Covid crisis, and sentiment that U.S. asset prices are stretched leading up to an uncertain election cycle,” one analyst says. Which prompts the question: have Covid responses, or will Covid responses, drive equity valuations?
  • According to Seeking Alpha's ETF Screener, the following euroarea focused ETFs have the greatest AUM: VGK, BBEU, EZU, IEUR, EWG, EWU, HEDJ, and FEZ.

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