VGK Stock Recent News
VGK LATEST HEADLINES
The ECB continues to fight against inflation and seems unperturbed by the market turmoil of the last few days. Dropping forward guidance, lowering inflation projections, and a growing awareness that the tightening so far can have adverse effects all suggest that today's meeting probably marks the final phase of ECB tightening.
Two of the largest Europe-focused ETFs have brought in over $6 billion this year.
A 50bp rate hike next week looks like a done deal. As regards sentiment indicators, consumer confidence remains low and actual assessment components are still weak.
When covering an ETF or any stock for that matter, it is important to look beyond only macros. Instead, one should go into detail about the maximum number of factors including the positioning of Europe relative to the U.S. and emerging markets.
Economists expected the U.S. economy to have added 185,000 jobs last month, following the 223,000 added in December. Forecasts also had the unemployment rate increase from 3.5% to 3.6%.
Headline inflation continues its fast decline and dropped to 8.5% in January, while core inflation remains stubbornly high at 5.2%. Lacking German inputs, these numbers are tricky to interpret, but for the ECB, high core inflation will be enough to hike by another 50bp tomorrow.
In 2023, many EU sectors will see diminishing growth due to a weak economy. Manufacturing, staffing, and construction are likely to face a small decline though not all sectors will shrink.
Despite a huge energy shock in the economy, production has held up well. There are no miracles here, though.
The VGK fund has returned 4.32% per annum since its inception in 2005, slightly outperforming its benchmark by 0.21%. The fund is heavily weighted towards the United Kingdom, which constitutes 25.5% of the portfolio exposures.
VGK trades at too high of a multiple given its exposures which are not that well positioned in relation to weakening European economic power. Finance exposures have some push from slowly rising rates in Europe, and healthcare is resilient, but the rest have a lot of wallet share in a weakening Europe.