European equities have been attracting interest from U.S. investors who may be nervous about the future of domestic markets and looking to diversify by investing overseas. Two of the largest ETFs covering developed markets in Europe have pulled in billions in assets during 2023.
Although the two funds are very similar, data from LOGICLY highlights some of the subtle differences between the JPMorgan BetaBuilders Europe ETF (BBEU), and the Vanguard FTSE Europe ETF (VGK), which have gained $3.9 billion and $2.1 billion in new assets year-to-date. Interestingly, both funds saw the bulk of those inflows added in the early months of the year. The fund’s largest outflows of 2023 were in late June.
Comparison of Two Europe ETFs
VGK offers exposure to a range of developed economies in Europe and tracks the cap-weighted FTSE All Cap Developed Europe index. It has an expense ratio of 0.11% and was launched in 2005. Currently, it has more than $19 billion in assets under management.
BBEU on the other hand tracks the Morningstar Developed Europe Target Market Exposure Index, another cap-weighted benchmark. The fund has an expense ratio of 0.09% and currently has $6.6 billion in assets. However, while VGK has nearly 20 years of trading under its belt, BBEU only launched about five years ago. It is slightly cheaper than VGK, with an expense ratio of 0.09%, a difference of two basis points.
Sector weightings between the two are virtually identical, with the largest differences showing up in real estate and consumer staples. The real estate sector has a 0.63% weighting in BBEU and a 1.74% weighting in VGK, while the consumer staples sector has a 12.23% weighting in BBEU and an 11.08% weighting in VGK.