Inverse Europe ETFs can be a great way to profit from EU economic shifts, allowing you to bet against the market's expected performance.
These ETFs work by tracking an index that declines when the underlying market rises, and vice versa.
The ProShares Short Euro ETF (EUO) is an example of an inverse Europe ETF that aims to deliver the opposite performance of the Euro currency.
By investing in an inverse Europe ETF, you can potentially profit from a decline in the EU economy, but be aware that past performance is not a guarantee of future results.
Additional reading: Neobanks in Europe
Capitalizing on EU Currency Woes
The euro currency is facing some tough times, and if you're looking to capitalize on its woes, inverse Europe ETFs might be the way to go. The euro has declined 9.3% over the past year and is trading at a two-year low against the U.S. dollar.
Mark Grant, managing director and chief global strategist at B. Riley FBR, thinks the dollar may break out of its range and head higher now, citing the relative strength of the U.S. economy compared with the European economy.
Intriguing read: Euro Etfs
The euro is headed for its fifth weekly decline in six weeks, and new data may continue to drag on the Eurozone currency. The Commerce Department recently revealed a strong first quarter U.S. economic expansion, which is helping to prop up demand for greenbacks.
The ProShares Short Euro (EUFX) is designed to provide 100% of the inverse, or opposite, return of the U.S. dollar price of the euro, on a daily basis. This means if the euro falls, the ETF will rise, and vice versa.
The VanEck Vectors Double Short Euro ETN (DRR) tracks the Double Short Euro Index, which provides a -200% exposure to the euro. This is a more aggressive bet against the euro, but it can also be a way to potentially profit from its decline.
On a similar theme: Short Etfs
Frequently Asked Questions
What is the ETF equivalent of QQQ in Europe?
The European equivalent of the QQQ ETF is the eQQQ, which tracks the Nasdaq 100 index. It is managed by Invesco and offers investors a way to access the European market.
What European ETF is similar to the S&P 500?
The STOXX Europe 600 index is the European equivalent of the S&P 500, offering broad market exposure and potential for price gains and dividends. It's tracked by 8 ETFs that investors can consider for their European market exposure.
What is the 3X inverse S&P 500 ETF?
The 3X inverse S&P 500 ETF aims to daily return 300% of the inverse of the S&P 500 High Beta Index performance, before fees and expenses. It's a high-risk investment with no guarantee of achieving its stated objective.
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