There are several ways investors can use ETFs and ETNs to gain access to European markets. There are specific ETFs for each country in Europe, and there are also Europe ETFs to target the region as a whole. And for those investors who want to make plays with interest rates and the foreign exchange rates, there are currency ETFs as well.
One of the best advantages of ETFs is that they give you the ability to enter certain markets without loading up on equities or battling index basket pricing. Instead, you can get instant exposure to Euro markets with one easy transaction. So if you need or want to invest in the Euro, an ETF might make sense for your trading strategy.
There are numerous ETF and ETN options for investing in the euro. Here's a sampling:
List of Euro ETFs
- EROTF – iPath EUR / USD Exchange Rate ETN
- EUFX - ProShares Short Euro ETF
- EUO – ProShares Ultra Short Euro ETF
- FXE - Invesco CurrencyShares Euro Trust ETF
- ULE – ProShares Ultra Euro ETF
Proceed With Caution
This basic list should have you covered for any investing strategy you want to use with the Euro, and hopefully with using exchange-traded products. But some of the more complex exchange-traded funds and notes on this list, such as leveraged and inverse exchange-traded products, should be tackled with caution. It's important to understand that these are generally suited for the more advanced trader.
As with any investment—a company stock, an ETF, Index or otherwise—make sure you thoroughly research the exchange-traded fund or any other financial asset before you make any trades, either long or short. Conduct your due diligence, watch how these funds react to different market conditions, take a look under the hood, and see what is in the funds. Consult a stockbroker, a financial advisor, or another financial industry professional if you have any questions or concerns, or even just to be on the safe side, especially with the leveraged and inverse funds.
While ETFs have many advantages, they have many disadvantages as well, as does any investment. So it's important to understand the investment vehicle before you trade it. After you have a full understanding on these Euro ETFs, you can consider adding either or both to your portfolio.
Good luck with all your trades!
Disclosure: At the time of publication of this ETF list of Euro ETFs, I do not have any open positions in the above funds - Mark Kennedy