The last 12 months have been fairly kind to some European Exchange-Traded Funds (ETFs) and four markets in particular, Belgium, France, Italy and Spain had until recently managed to outperform the S&P 500.
The correction that many consider is due in global markets, came to take the shine off the figures recently with a series of pullbacks, prompting the question as to whether European ETF’s are still worth a second look or not?
Market speculators who use a MetaTrader platform in the equity markets as well as forex trading, will no doubt be thinking about tweaking their hedging positions if they think we are about to enter a period where bears might outnumber bulls.
Spanish top the charts
The MSCI Spain index shot up by over 50% in the last whereas the S&P 500 managed a little over 20% in the same period.
The Spanish ETF continues to gather strength and shows a continued upward trend despite the recent pullback in markets. If anything, the lower prices that occurred in recently, were merely seen as a buying opportunity for a number of traders who wanted to buy in at what they saw was a goof buy point.
The Italian ETF managed 47% growth in the last 12 months but there is some evidence in the markets that the price is now heading into resistance territory and may pause for breath and a sense of direction, although there is still definite buying interest.
Belgium a longer term bet
One of the other top performers in the last year was the Belgium Investable Market Index.
The price has subsequently been moving in more of a triangle pattern and some traders with expertise in this market that those with a more long-term view, may be rewarded if they buy and sit tight for a while.
Allez les Bleus
The French ETF market managed a highly respectable 24% rise over the last 12 months and again despite a recent pause, the long-term trend is believed to be strong.
The price is currently stuck in middle ground according to some analysts but those traders that are prepared to wait for the next sign of a pullback, may well be cheering Allez les Bleus in the long run.
Super-Mario to the rescue
Mario Draghi already assured investors a couple of years ago that the ECB was ready to do whatever it takes in order to ensure that the euro-zone did not collapse.
His rallying cry two years on is “we aren’t finished yet” as measures were introduced to fight deflationary threats and boost growth by moving rates into negative territory.
The ECB also announced several other measures that will see money being lent at extremely low rates as well as making plans for an asset purchase program plan in the very near future.
ETF’s offer a way of providing a level of exposure to a fairly broad basket of European equities and conditions could be seen as favourable with the Fed tapering its QE programme along with Mario Draghi confirming that the ECB is not deviating from its easing path and potential QE initiative of its own.
All this may well suggest that money is likely to continue flowing into European Equities for the foreseeable future.
By Archie Quinn
Archie is always looking for new information on Forex and stock market investing. An avid blogger, his articles appear mainly on investing, financial and Forex blog sites.