Q: Hi 5i,
I am interested in purchasing HXX to get tax efficient exposure to Eurozone in my NonReg account. The AUM is approx. 95M, Counter party exposue is 24% and the 30 day trading volume is 1,500. Do you see any issues with buying this ETF for the long haul? Is Eurozone a decent valuation compared to Canada and USA markets? thanks
I am interested in purchasing HXX to get tax efficient exposure to Eurozone in my NonReg account. The AUM is approx. 95M, Counter party exposue is 24% and the 30 day trading volume is 1,500. Do you see any issues with buying this ETF for the long haul? Is Eurozone a decent valuation compared to Canada and USA markets? thanks
5i Research Answer:
Europe has its issues, but overvaluation is not one; it is much cheaper than North American markets on nearly every metric. We think HXX would be fine for tax-efficient exposure. While not huge, if one is investing (and not trading) we would not see liquidity as an issue. Keep in mind that ETFs can also create new units with incremental buying instead of finding a seller.