4 Best-Performing European Mutual Funds

Nitish Marwah

Exports from Eurozone continue to nudge higher despite trade war woes that are plaguing global markets. Per the latest data from Eurostat on Jun 4, the single-currency consortium of 19 countries’ export rose 5.2% in April.

The increase in exports was achieved on the back of increased demand for consumer goods as well as mineral fuels. Meanwhile, Eurozone’s exports to China also rose in double digits in the month despite fears regarding China’s economic slowdown.

Further, Eurozone’s unemployment fell to its lowest levels in more than a decade. Such encouraging conditions call for investing in mutual funds from the region.

Wage Growth in Eurozone at 10-Year High

A report released by Eurostat on Jun 17 stated that the region’s wage growth surged to its fastest pace in the past decade. Wage growth in Eurozone increased 2.5% in the first quarter of this year, higher than 2.3% from the last quarter of 2018. This marks its fastest pace of growth since 2009.

Furthermore, this rate of growth is also higher than the 1.8% average in the past three years. This indicates that Eurozone has remained largely resilient to global economic downturns. A separate report, also released by Eurostat, stated that the region’s vacancy rates increased to only 2.3% in the first quarter.

Unemployment Stable at its Lowest Level in Over a Decade

On Jun 5, the European Union statistics agency announced that unemployment rate in Eurozone fell to 7.6% in April from 7.7% in March. This meant that 64,000 lesser number of people remained jobless in April compared to March. This also marked the metric’s lowest settlement since August 2008.

Furthermore, when compared with 2018, more than a million people from the region havefound jobs, therefore reducing unemployment significantly. Experts are of the view that the decline in joblessness will eventually lead to an increase in consumer prices. Such an event would push the overall Eurozone inflation to ECB’s 2% target in the short term.

4 Fund Picks

Given such positives, we have highlighted four European mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

DWS World Dividend Fund - Class S SCGEX seeks to provide total returns with a focus on both current income and capital appreciation. The fund invests the majority of its net assets in stocks that offer dividend. Investments mostly include common stocks issued by U.S. and non-U.S. companies. The fund may also invest in preferred stocks and other equity securities such as warrants and convertible securities.

This Europe - Equity product has a history of positive total returns for over 10 years. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

SCGEX has three and five-year returns of 2.4% and 1.6%, respectively.

T. Rowe Price European Stock PRESX fund seeks appreciation of capital in the long run by investing in common stocks. This fund invests the lion’s share of its assets in companies from Europe. Normally, the fund is invested in companies of any capitalization from a minimum of five countries.

This Europe - Equity product has a history of positive total returns for over 10 years. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

PRESX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.97%, which is below the category average of 1.18%. The fund has three and five-year returns of 3.3% and 0.6%, respectively.

Fidelity Europe FIEUX fund seeks appreciation of capital in the long run. It invests primarily in common stocks of different European companies.

This Europe - Equity product has a history of positive total returns for over 10 years. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

FIEUX has three and five-year returns of 3.6% and 0.6%, respectively.

ProFunds Europe 30 Fund Investor Class UEPIX fund seeks returns on investments corresponding to the performance of the ProFunds Europe 30 Index. The index comprises companies whose offices are located within Europe and shares are traded on U.S. bourses or The Nasdaq Stock Market as depositary receipts or ordinary shares.

This Europe - Equity product has a history of positive total returns for over 10 years. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

UEPIX has three and five-year returns of 6.1% and 0.7%, respectively.

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