The iShares Core MSCI Europe ETF (NYSEMKT: IEUR) has delivered total returns of about 12% year to date and 23% in the past year (as of July 31). Based on Bloomberg research, there are a few reasons why European stocks are booming: Better earnings: European companies in the Stoxx 600 index reported 17% earnings growth in the second quarter, the best in four years. Lower oil prices: European countries mostly import their oil and gas, which made them vulnerable to higher prices from the Iran conflict.
But oil prices have recently fallen, making Europe's cost of doing business lower -- and reducing European inflation. Spread of the AI trade: Investors are looking beyond AI stocks and putting money into companies they believe will benefit from future productivity gains and AI profit boosts. European stocks can fit this strategy.
Europe is also home to major semiconductor stocks, such as the Netherlands' ASML Holding. European stocks don't always beat America. In the past 10 years, the S&P 500 has strongly outperformed the iShares Core MSCI Europe ETF -- about 2 to 1.
This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia.
Continue » But if you're optimistic about Europe's economy and want to diversify your portfolio away from U.S. tech stocks and the past few years of the AI trade, this international ETF could be a good choice. Let's take a closer look. The iShares Core MSCI Europe ETF (IEUR) holds 1,009 stocks from 12 European countries.
The top markets represented in the ETF are the United Kingdom (22.9% of the fund), France (14.6%), Switzerland (13.8%), Germany (13.2%), and the Netherlands (8.6%). This international ETF charges a low expense ratio of 0.10% and has paid a strong trailing 12-month dividend yield of 3.11%. That yield is better than many of the best dividend index funds.
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