The global financials sector has seen a nice rebound in recent years since the U.S. housing crash which led to worldwide panic among banking firms in many countries around the world.
Over the past 10 years, however, European banking firms have perhaps been the slowest to rebound from the financial crisis, leading to a situation where European financials have continued to lag North American counterparts, both in terms of valuation as well as growth.
A number of geopolitical factors relating to the Greek sovereign debt crisis and austerity measures put in place, as well as Middle Eastern conflict shaping discussions surrounding immigration and economic stability have continued to impact the European financials sector.
The continued headwinds many analysts point to as reasons to stay closer to home when considering financials stocks remain, however the potential return over the medium to long-term for many European sectors remain a strong incentive for investors to consider this sector at current levels
Investors looking for an exchange traded fund (ETF) option which encompasses a broadly diversified selection of European financials stocks should take a look at the iShares MSCI Europe Financials Sector Index ETF (NYSE:EUFN).
With many of the geopolitical risks European financial firms face largely centered in specific regions and economic improvement likely in key financial hubs across Europe, investing in an ETF which tracks the broader euro-zone will spread out much of the downside risk while providing broad exposure to continued overall economic recovery across Europe.Invest wisely, my friends.