For investors seeking momentum, WisdomTree Europe Hedged SmallCap Equity Fund EUSC is probably on radar now. The fund just hit a 52-week high and is up over 28% from its 52-week low price of $20.57/share.
But are more gains in store for this ETF? Let's take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
EUSC in Focus
EUSC focuses on the small-cap equities segment of the European market and nullify exposure to fluctuations of the Euro movements relative to the US dollar. The fund has a small-cap focus with the industrials, financials and consumer discretionary sectors getting a double-digit allocation each.
It charges investors 58 basis points a year in fees and is heavily concentrated on the top three holdings - UnipolSai SpA, Hugo Boss AG and Eutelsat Communications (see: all European Equity ETFs here).
Why the Move?
The U.S. economy has been on the path of monetary policy tightening while the Euro zone still practicing super-easy monetary policies. Investors should also note that the business and consumer sentiment have been at about a six-year high in the European Union. Euro zone inflation was 1.1% in December, marking the highest inflation level since September 2013.
An easy money era along with an improving economy is creating a great situation for those in the small-cap segment of the European market as this capitalization better reflects the domestic economy. Plus, a currency-hedged approach in a rising dollar environment was another positive for the fund.
More Gains Ahead?
The fund has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. However, it seems that EUSC might continue with its strength given a positive weighted alpha of 17.30 . Since a positive weighted alpha hints at more gains, there is definitely still some promise for investors who want to ride this surging ETF a little further.
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