Global Courant 2023-04-29 20:00:01
As luxury stocks are all the rage overseas, State Street Global Advisors believes investors should consider European ETFs if they want to capitalize on their outperformance.
Matt Bartolini, the company’s head of SPDR Americas Research, finds three reasons why the backdrop becomes particularly appealing. First and second on his list: valuations and earnings improvements.
“That’s completely different from what we saw for U.S. companies,” he told CNBC’s Bob Pisani on “ETF Edge” this week.
His comments come as LVMH became the first European company to surpass the $500 billion market value earlier this week.
Bartolini cites price momentum as a third driver of investor shift.
Are SPDR Euro Stoxx 50 ETF (FEZ) is considered a broad European ETF. The ETF is up about 20% so far this year, with prices up nearly 1.2% since early January.
While the fund’s largest holding is LVMH at 7.29%, according to the company’s website, Bartolini claims the shift is not just for luxury stocks, but lower consumer stocks as well.
His company’s website lists a French cosmetics company L’Oreal — which is up nearly 30% this year — as one of his fund’s top holdings. It also shows that FEZ allocates more than 20% to consumer durables – 2.5% higher than the second most allocated sector.
“That’s on a broad level,” he said. “So basically buying Europe and selling the US is some of the trade we’ve seen.”
FEZ ended the week down 0.41%, but ended the month up more than 3.1%.
