For my second pick for my new actively allocated, passive ETF portfolio, I’m going to keep working on the equity core. To yesterday’s pick of the iShares Core S&P 500 ETF (IVV), today I’m adding the SPDR Euro Stoxx 50 ETF (FEZ). This ETF concentrates on European blue chip stocks and tracks the Stoxx 50 Net Return Index. This ETF will fill the Non-U.S. Developed Markets slot in the portfolio.
Why a European stock fund?
Pretty simple really.
The EuroZone economy is growing faster than the U.S. economy recently. (And when’s the last time that happened?)
The euro is outperforming the dollar–good news for dollar-based U.S. investors–but not by so much, yet, as to endanger the competitive advantage for exports that comes with a cheaper euro.
And sometime soon, the European Central Bank’s October 26 meeting is a good possibility, the EuroZone’s central bank will announce its schedule for the next step in reducing the size of its asset purchases and maybe (probably) even put a deadline out there for ending the program. That will also strengthen the euro and will be another sign that the EuroZone economy is relatively healthy again.
This ETF is up 26.02% for 2017 as of October 3. It charges an expense ratio of 0.29% and pays a dividend yield of 1.36%. (For comparison purposes, the iShares Core S&P 500 pays a dividend of 2.02%.) Total assets for this Europe-focused ETF come to $4.5 billion.
I’m adding it to my new Perfect 5 ETF Portfolio today. (And, yes, I know about the turmoil in Spain over Catalon demands for independence. I think this is relatively short-term (if continuing) problem for the euro.)
If you want to catch up on why I’ve started that portfolio or how it will be run, check out yesterday’s post announcing the portfolio.
To catch up on the first pick for the portfolio, check out my post from yesterday.
Please note that as I wrote yesterday in announcing this new ETF portfolio, today’s two ETF picks are the last that I’ll be posting on my free Jubak Picks site. If you want to get the last two picks and/of to follow the subsequent picks and updates on this portfolio, you have three options.
You can go to the free Post of the Month posts on my subscription site JugglingwithKnives.com where you’ll be able to read the last two picks for this portfolio for free on Wednesday and Thursday of this week.
Or you can take up my two week free trial offer to JugglingwithKnives.com and then, if you think what you’ve read is valuable you can subscribe at 20% off (for the first year) to JugglingwithKnives.com. That’s a price of $59 versus the regular $79 price.
Or you can take up my two week free trial offer to JubakAM.com and then, if you think what you’ve read is valuable you can subscribe at 20% off (for the first year) to JubakAm.com. That’s a price of $159 versus the regular $199 price.
You find the links to these two offers below.