Tag Archives: FEZ

US Investors Have Been Net Buyers Of European Equities For Over A Year Now

Confidence in the European economy is slowly coming back. The eurozone’s economy (countries that have adopted the euro as their currency) grew by 0.3% in the last quarter of 2013 compared to only 0.1% in the quarter before. The Dutch economy grew by as much as 0.7% in the fourth quarter relative to the third quarter. Growth for the whole 28-member EU was 0.4% in the last quarter of 2013. For the whole of 2013 the economy of the eurozone contracted with 0.4% while growth for the whole EU grew with 0.1%.

This growth in the European economy has gradually attracted investors from outside the EU to buy European Equities since last year. US investors have been net buyers of European equities for over a year now as the chart below, courtesy of Gavyn Davies, depicts. The Eurostoxx 50 ETF (FEZ) has showed a very nice return lately and is up 20% from a year ago.

NET US Buying of European Equities (12mma)

NET US Buying of European Equities (12mma)

But as Shaun Port of Nutmeg pointed out, most of this money has actually been going in UK stocks. Historically US investors seem to favor UK stocks above stocks from other countries in the eurozone. Which is pretty interesting because the FTSE 100 has been in the same tight range for over a year now (chart).

US Net Purcheses Of European Equities, Rolling 12-month total

US Net Purchases Of European Equities, Rolling 12-month total

As a bonus: here is the same chart from Shaun Port as a percentage of total market capitalization.

US Net Purcheses Of European Equities, Rolling 12-month total As A Percentage Of Market Capitalization

US Net Purchases Of European Equities, Rolling 12-month total As A Percentage Of Market Capitalization