The Morningstar European ETF Research Team has launched four new ETF Research Reports. Click on the ETF names below to be taken to the Morningstar Research Reports.
To access the full list of the ETFs covered by Morningstar's ETF analysts, and for more information on Morningstar's ETF Research, please click here. An explanation of Morningstar's Star Rating for ETFs can be found here.
Lyxor ETF STOXX Europe 600 Healthcare
Excerpt from the report: This ETF offers large-cap equity exposure to the European healthcare sector. The STOXX Euorpe 600 Healthcare Index correlated 37% with the STOXX Europe 600 Index and 55% with the MSCI World Index over the last ten years and would therefore appear to offer diversification benefits within a broader equity allocation.The current uncertainty within financial markets makes the defensive nature of the healthcare sector an appealing investment to many but, as with all sector ETFs, this ETF is best deployed as a tactical tool in a well diversified portfolio.
Lyxor ETF STOXX Europe 600 Personal & Household Goods
Excerpt from the report: Given the nature of the index constituents, the exposure gained through this ETF is not Europe-specific but rather driven by global economic trends. For instance, British American Tobacoo (BATS)--the largest index constituent--generates only 17% of its revenue in Western Europe. LVHM (MC)--another top index constituent--sources only a third of its revenue from Europe.
Lyxor ETF STOXX Europe 600 Telecommunication
Excerpt from the report: As is the case with all sector ETFs, this ETF is best deployed as a tactical tool in a well diversified portfolio. The ETF is most suitable for investors with a particularly bullish (or bearish) view on the telecommunications sector; and on Vodafone and Telefonica in particular, as they represent an aggregate of 46% of the index’s value. Investors should also keep in mind that the European telecommunications market is already relatively mature and companies are increasingly looking for growth outside developed Europe. As such the industry is gradually becoming more dependent on global growth in the sector and less a pure European play.
Source STOXX Europe 600 Optimised Automobiles & Parts ETF
Excerpt from the report: Given the nature of the automobile industry, the exposure gained through this ETF is not Europe-specific but rather driven by global market trends. The index showed moderate correlations with international stock markets over the last ten years and therefore would appear to offer some degree of diversification benefits when considered within the context of a broader equity portfolio. The ETF is perhaps best deployed as tactical tool for investors speculating on the prospects of the automobile market, and Germany’s car makers in particular.
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