View all WisdomTree insights in the Europe Small Caps category.
For years, Europe was the “value sleeve” in global portfolios—ignored, under-weighted and underperforming. But a powerful shift is underway. From defense spending to dividend discipline, Chris Gannatti and Sam Rines breakdown how Europe’s macro landscape is turning into an equity opportunity that’s hard to overlook.
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We believe there is a unique opportunity today to ride the economic recovery in Europe that has yet to find its footing. Brian Manby explains why investors seeking to access European economic recovery should consider our Europe SmallCap Dividend Fund (DFE).
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U.S. equities have been outperforming European equities for more than a decade, but the periods when the performance reversed had something in common: The euro was strong. Jeff Weniger explains how to position your portfolio if the euro’s five-month rally turns into something like a five-year rally.
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There is a popular belief that the failure of European markets to keep pace with the U.S. over the past decade is caused by overweight positions to banks, which have struggled in the post-crisis environment, and the absence of firms comparable to the U.S. tech giants. Jeremy Schwartz examines this narrative and offers different strategies to include European equities in your portfolio.
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New leadership at the European Central Bank is motivating a fresh look at the policy tools available for the central bank, and WisdomTree believes European markets will find support over the coming 12 to 18 months. What is the best exposure to Europe for more a bullish view?
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Lately it has seemed easy to find reasons to avoid investing in European assets. Christopher Gannatti highlights three reasons why we believe the risks can create valuation opportunities in Europe.
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The euro appreciated more than 14% in 2017, and the strength and intensity of this move caught investors by surprise. One of the biggest effects of this move was that we saw many U.S. investors in ETFs shifting from hedged to unhedged European equity exposures. But forecasting currency can be tricky.
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Will this year’s strong performance in European equities continue in the year to come? While there are potential headwinds for the recovery, there is also an argument these risks are sufficiently priced in and this European rally is just getting underway.
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A confluence of factors is affecting the euro—from politics in the U.S. to monetary policy shifts that may occur later this year in the eurozone. This has caused a shift in the attention of investors, from a focus on currency-hedged strategies that have the goal of isolating the equity market returns alone to “double-decker” strategies that add currency risk on top of the equity returns.
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After getting past a variety of elections—most notably the French presidential election—without anti-market sentiment spreading throughout Europe, we have seen a relatively large shift in equity market performance. In Europe, we’ve seen the cyclical nature of small caps—and it happens to be connected to a distinct outperformance over European large caps over the longer term.
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Small-cap stocks can deliver some of the greatest sensitivity to changes in sentiment across global asset classes. European small caps were a great example of this. When Mario Draghi delivered his “whatever it takes” speech in defense of the euro on July 26, 2012, European small caps delivered a sustained rally that continued pretty much unabated until June 6, 2014.
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It’s difficult to find an edge when investing. In many cases, it comes down to a single characteristic that has the potential to mitigate an important risk. To that end, we offer up European small caps. The edge we see? Their dividend yields.
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