ALPS - O'Shares International Developed Quality Dividend ETF

OEFA

Market cap $42.6M

French bond yields have risen significantly against German bunds and are likely to stay elevated or potentially move higher. The European Central Bank still appears to be a reliable backstop against excessive bond turmoil.

Investors can be forgiven if they were underallocated to Europe equities entering 2025. After all, stocks across the pond had spent considerable time lagging domestic counterparts.

As concerns related to tariffs weigh heavily on the U.S. market, investors are increasingly eyeing Europe. The ALPS O'Shares Europe Quality Dividend ETF (OEUR) is designed to provide exposure to European companies with good earnings and strong balance sheets that also provide investors with income.

Amid growing investing turmoil, investors may be looking for options that have proven their durability. Foreign equities, specifically, have done well to start the year, while U.S. stocks have tumbled.

Plans to increase defense and infrastructure spending offer compelling economic benefits for Germany's lagging manufacturing sector. The US seems to be dramatically reducing spending through its Department of Government Efficiency (DOGE) effort.

Following a multi-year run of lagging U.S. stocks, European stocks are off to impressive starts in 2025. Three of the four largest exchange traded funds in the category are sporting double-digit year-to-date gains and the one that isn't is still up 6.6%, an advantage of 250 basis points over the S&P 500.

Is now the time to diversify? U.S. markets have floundered somewhat amid rising uncertainty.

Absolute Return Partners is a London-based investment advisory business. Founded by Niels Jensen in 2002, it focuses on providing bespoke alternative investment solutions to institutional investors.

The ECB cut rates by 25bp as widely anticipated, but a slightly hawkish tilt bear flattened the EUR curve, which in our view remains priced aggressively. In the US, as the markets head towards the Fed's first rate cut, the probability of a larger cut rose slightly on Thursday.

Former ECB President Mario Draghi's 400 pages of economists' ‘greatest hits' and a few more controversial proposals provide Europe's most comprehensive plan yet to revive its economy, decarbonise and become more self-sufficient. Economic growth in Europe has been weak compared to the US and China for a long time, but the sense of urgency around economic reform outside of crises was lacking.