European ETFs to Capitalize on Debt Crisis

Joel Anderson  |

The trends in European markets appear to be harder to read than sanskrit. As news out of Greece and the EU continues to either embolden or terrify the markets, many investors may simply want to run away. However, the Chinese word for crisis is made up of two characters: one meaning danger and the other meaning opportunity. The volatility of the European markets may leave some investors looking to play their hunches on whether the EU will save the day or whether a total economic meltdown is imminent. For those investors, there are several ETFs that provide an excellent opportunity to do so by making bets on the overall movement of the markets.

Continent-Wide ETFs

The Vanguard MSCI Europe (VGK) is one of the broadest and simplest investments.  The fund seeks to match exactly the daily movement in the MSCI Europe Index, providing an easy one for one bet. For those inclined to take on a little more risk, the ProShares Ultra MSCI Europe (UPV) and the ProShares UltraShort MSCI Europe (EPV) are both leveraged ETFs that seek to double the movement of the MSCI Europe Index. While Ultra moves with the index, UltraShort is an inverse ETF that is designed to move opposite the index's daily return. Also available is the iShares S&P Europe 350 (IEV), which seeks to match the daily movements of the S&P Europe 350 Index, and the iShares MSCI Europe Financials Sector (EUFN), which allows for investors to place a bet specifically on the success or failure of the battered European financial sector on the day.

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There are a number of other ETFs that track the indices of individual European nations:

  • Germany:  iShares MSCI Europe Germany (EWG)
  • France:  iShares MSCI Europe France (EWQ)
  • Italy:  iShares MSCI Europe Italy (EWI)
  • Spain:  iShares MSCI Europe (EWP)
  • United Kingdom:  iShares MSCI Europe UK (EWU)
  • Netherlands:  iShares MSCI Europe Netherlands (EWN)
  • Switzerland: iShares MSCI Europe Switzerland (EWL)

Euro ETFs

For those interested in the future of the continent's currency, there are ETFs available for speculation based on currency values. Several such ETFs track the value of the Euro in US dollars and move in correspondence to that shift. The CurrencyShares Euro Currency Trust (FXE) offers an ETF that seeks to match the daily move in value of the Euro.  There are also two sets of leveraged ETFs that track the same movements. ProShares offers their Ultra Euro (ULE) and UltraShort Euro (EUO), both of which are leveraged to double the daily return of the Euro. Once again, UltraShort represents the inverse ETF and will move opposite to the value of the Euro with double the value. Market Vectors also has 200 percent long and short leveraged ETFs linked to the Euro, the Double Long Euro (URR) and the Double Short Euro (DRR).

Many Options for the Interested Investor

In each case, these ETFs provide the savvy investor with a vehicle for speculating on the overall trends of the markets in Europe. Anyone looking for an easy way to make long or short bets on the ultimate direction of the European markets should seriously consider using some of these funds as a means to do so.


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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