SPDR DJ Euro Stoxx 50 (ETF) (FEZ)

DJ Euro Stoxx 50 ETF seeks to closely match the returns and characteristics of the Dow Jones EURO STOXX 50 Index (the Index). The Index seeks to provide a blue-chip representation of the market sector leaders in the Eurozone viz., Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. The Index represents the performance of the 50 largest companies within the Eurozone portion of the Dow Jones STOXX Total Market Index.


The Index captures approximately 60% of the free float market capitalization of the Dow Jones EURO STOXX Index, which in turn covers approximately 95% of the free float market capitalization of the represented countries. Its target benchmark includes some of the largest economies on the continent; however, it leaves out some of the bluest of the region's blue chips listed in the UK, Sweden and Switzerland. That makes this ETF tough to use for exposure to exhaustive European large caps.


The Fund offers one of the highest yields among Europe-stock ETFs. Its 0.33% expense ratio makes it one of the cheapest options in a category filled with costly funds run by short-tenured managers. The fund is highly concentrated as it owns just 50 holdings and keeps more than 33% of its money in its top ten positions. The Fund has highest exposure to companies listed in France and Germany at 33% and 24% respectively. Financial sector occupies 38% in the fund, while utilities and energy sector totally make up for nearly 20% of the fund, among others.


Given the low expense ratio and a return in excess of 30% in the past one year, the performance appears balanced and consistent with the three year return standing at 20%. Although, the Fund lacks a pan-European presence, the current portfolio seems to be good enough and effectively spread across a dozen high growth economies.