Europe ETFs Likely To Gain From Low Rates After Draghi's Tenure

Against this backdrop, below we highlight a few likely ETF winners if the bank loosens monetary policy further.


International Treasury

On cues of more stimulus, the entire German bund curve yielded less than zero at August-end. Since yields and bond prices are inversely related, this fund iShares International Treasury Bond ETF (IGOV - Free Report) (which has a sizable exposure to Europe), may gain if the ECB cuts rates further.

Currency-Hedged Large-Cap Stocks

The continuation of the low-rate policy and a weaker Euro should boost the currency-hedged Eurozone ETFs in the near term. iShares Currency Hedged MSCI Eurozone ETF (HEZU - Free Report) and Xtrackers MSCI Eurozone Hedged Equity ETF (DBEZ - Free Report) could thus be gainers.


Amid low rates, demand for high-yielding products should grow. So, investors can bet on ETFs like WisdomTree Europe SmallCap Dividend Fund (DFE - Free Report), which yields about 4.23% annually.

Small Cap

Low interest rates and stimulus may help the domestic-focused, small-cap ETFs to some extent. WisdomTree Europe Hedged SmallCap Equity Fund (EUSC - Free Report) can thus benefit.

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Disclosure: contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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