We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Europe ETFs That Braved First Monthly Fall Since March
Read MoreHide Full Article
The pan-European Stoxx 600 lost about 2.5% in July, marking its first monthly decline in four months. The loss stemmed from downbeat GDP data and corporate earnings. The Euro zone economy shrank 12.1% in the second quarter of 2020, compared to a decline of 3.6% in the first three months of the year, according to preliminary data from the region’s statistics office.
On the other hand, shares of banking giant HSBC Holdings Plc (HSBC) dropped after it reported a 77% drop in first-half net profit. Societe Generalereported a 1.26-billion-euro loss for the second quarter.Also, BNP Paribas reported a net income decline of about 7% year over year for the second quarter.
What Lies Ahead?
However, stocks are likely to gain ahead as the key pandemic deal is signed. After a tough negotiation, European Union leaders agreed on a massive (750 billion euros) stimulus plan for their coronavirus-shattered economies in one of the longest EU summits in history in late July.
Initially, there were big differences on the allocation of the stimulus between grants and loans.At the meeting, the leaders agreed to distribute 390 billion euros, out of total 750 billion funds, in the form of grants — down from the 500 billion euro grant initially proposed by France and Germany in May. The EU agreed to repay all of the new debt by 2058. Meanwhile, member states will also have to come up with plans on how the new funds will be invested.
Investors should also note that not all Europe ETFs underperformed in July. There are products that have beaten the S&P 500 (up 3.7%) in the past month (as of Jul 31, 2020). Below we highlight all those Europe ETFs.
Image: Bigstock
Europe ETFs That Braved First Monthly Fall Since March
The pan-European Stoxx 600 lost about 2.5% in July, marking its first monthly decline in four months. The loss stemmed from downbeat GDP data and corporate earnings. The Euro zone economy shrank 12.1% in the second quarter of 2020, compared to a decline of 3.6% in the first three months of the year, according to preliminary data from the region’s statistics office.
On the other hand, shares of banking giant HSBC Holdings Plc (HSBC) dropped after it reported a 77% drop in first-half net profit. Societe Generalereported a 1.26-billion-euro loss for the second quarter.Also, BNP Paribas reported a net income decline of about 7% year over year for the second quarter.
What Lies Ahead?
However, stocks are likely to gain ahead as the key pandemic deal is signed. After a tough negotiation, European Union leaders agreed on a massive (750 billion euros) stimulus plan for their coronavirus-shattered economies in one of the longest EU summits in history in late July.
Initially, there were big differences on the allocation of the stimulus between grants and loans.At the meeting, the leaders agreed to distribute 390 billion euros, out of total 750 billion funds, in the form of grants — down from the 500 billion euro grant initially proposed by France and Germany in May. The EU agreed to repay all of the new debt by 2058. Meanwhile, member states will also have to come up with plans on how the new funds will be invested.
Moreover, the ECB restarted QE from November 2019 and has a negative interest in place. In April, finance ministers had already approved a 540-billion-euro package of short-term fiscal stimulus. Plus, the individual governments announced their individual economic stimulus packages. All these measures should favor Europe stocks in the coming months.
Not All Europe ETFs Fared Badly in July
Investors should also note that not all Europe ETFs underperformed in July. There are products that have beaten the S&P 500 (up 3.7%) in the past month (as of Jul 31, 2020). Below we highlight all those Europe ETFs.
iShares MSCI Sweden ETF (EWD - Free Report) – Up 7.3%
Global X MSCI Norway ETF (NORW - Free Report) – Up 7.2%
Global X FTSE Nordic Region ETF – Up 6.8%
iShares MSCI Finland ETF (EFNL - Free Report) – Up 6.8%
iShares MSCI Denmark ETF (EDEN - Free Report) – Up 6.5%
First Trust IPOX Europe Equity Opportunities ETF (FPXE - Free Report) – Up 4.8%
iShares MSCI Ireland ETF (EIRL - Free Report) – Up 4.7%
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>