With the UK and France both seeing elections recently, how have European ETFs performed?
Last week saw the UK political climate move to a Labour government after 14 years with the Conservatives in power. The handover saw Labour party leader Keir Starmer take over as Prime Minister from Conservative party leader Rishi Sunak who had held the post since 2022.
Meanwhile, in France, electors saw a shock election result with a swing to the left after President Emmanuel Macron called a snap election in June.
In a bid to defend against a surge of far-right votes, the election was won by an alliance of left-leaning parties called the New Popular Front. However, that party failed to secure a majority so a coalition is likely needed to be built.
According to Money Management’s Investment Centre, there are four dedicated European ETFs available to Australian investors.
These are:
- Betashares WisdomTree Europe ETF Currency Hedged
- BlackRock iShares Europe ETF
- Vanguard FTSE Europe Shares ETF
- Global X Euro Stoxx 50 ETF
Over one year to 8 July, the best-performing of these ETFs is Betashares WisdomTree Europe ETF Currency Hedged which has returned 11.1 per cent, followed by the BlackRock iShares Europe ETF which has returned 10.6 per cent.
Both the Vanguard FTSE Europe Shares ETF and Global X Euro Stoxx 50 ETF have returned 10.5 per cent over the same period.
The investment objective of the Betashares WisdomTree Europe ETF Currency Hedged, which was launched in 2016, is to provide an investment return that aims to track the performance of the WisdomTree Europe Hedged Equity Index.
It currently has 28.7 per cent allocated to French equities but none allocated to the UK, as of June 2024.
Meanwhile, the BlackRock iShares Europe ETF was launched in 2000 and aims to track the investment results of an index composed of European equities, including 23 per cent allocated to the UK and 18 per cent allocated to France, as of March 2024.
