Sector Composition Changes in VEURX until 1Q16

The Vanguard European Stock Index Fund – Investor Shares (VEURX) aims to “track the performance of a benchmark index that measures the investment return of stocks issued by companies located in the major markets of Europe.” VEURX’s present target index is the FTSE Developed Europe All Cap Index. Earlier, VEURX used to track the index.

The underlying index is market-cap-weighted and invests in stocks of 1,219 companies in 16 European nations.

VEURX’s assets were spread across a staggering 1,249 stocks as of March 2016. It was managing assets worth $19.0 billion. As of the March portfolio, its equity holdings included Siemens Aktiengesellschaft (SIEGY), Daimler AG (DDAIF), BASF SE (BASFY), Diageo (DEO), and Deutsche Telekom AG (DTEGY). Its top ten holdings formed 16.3% of the portfolio.

It’s important to remember that VEURX is an index-tracking fund. So when we talk about its portfolio details, we’re essentially discussing the underlying index.

VEURX changed its underlying benchmark just six months ago. Because of this, its holdings have undergone a change. Half a year ago, it was investing in more than 500 securities. Now it invests in more than 1,200 securities. This means we won’t be able to do a year-ago portfolio change comparison.

Financials, consumer staples, industrials, healthcare, and consumer discretionary are the core sectors in which VEURX invests. These five sectors combined form a little less than three-fourths of the portfolio. Financials forms a fifth of the fund’s assets.

VEURX is a hassle-free investment option for investors who don’t want to go through the trouble of selecting an actively managed fund.

Next, let’s see what contributed to VEURX’s performance in 1Q16.