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Vanguard FTSE Developed Europe All Cap Index ETF (VE)
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Global X Europe 50 Index Corporate Class ETF (HXX)
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Banco Santander S.A. Sponsored ADR (Spain) (SAN)
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ICICI Bank Limited (IBN)
Q: For past several weeks, International markets have been outperforming US markets. Europe, Emerging markets and Japan seem to be the standouts. Financials, particularly have done very well. MSCI Europe Financial Index is up 25% compared to -2.5% for XLF. Do you believe that this trend is not going away soon and it would make sense to diversify a portfolio with addition of European Equities ?
If so, would be your preferred route ?
What is your view on Banco Santander and ICICI Bank and whether these will be good options and serve as good proxies for these economies and markets ?
Thank You
If so, would be your preferred route ?
What is your view on Banco Santander and ICICI Bank and whether these will be good options and serve as good proxies for these economies and markets ?
Thank You
5i Research Answer:
Note we do not cover international equities so take comments with caution. We have no argument against 'some' European diversification, but would note that this is a very crowded and popular trade right now. Europe is cheap, but is benefiting more from the 'avoid US' trend rather than on its own fundamentals. Europe is not going to be immune to a global economic slowdown, if one occurs. Any positive news in the US could see money flows reverse (as we have seen this week). So, we would look to general diversification here rather than wholesale portfolio moves. We would prefer the ETF approach, VE or HXX.