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3 ETFs that may very well make you a lot of money in the future

Mart Poom
23. 6. 2023
4 min read

Last time I focused on dividend ETFs, which can provide you with passive income just by their regular payout. But today, we'll look at the opposite end of the spectrum - growth ETFs, which have solid prospects for future growth.

Today, we'll look at 3 ETFs that have solid potential for future growth. And more importantly - the premises that should make it happen.

iShares MSCI Europe Quality Dividend UCITS ETF $EQDS

The iShares MSCI Europe Quality Dividend UCITS ETF is well positioned for growth in the future for several reasons:

It focuses on quality European companies that are well positioned to generate sustainable dividends over the long term while providing the potential for share price appreciation. This strategy of valuation selection and quality could support this fund to outperform the market over the long term. The fund has diversified exposure to large and mid-cap companies in 16 diverse European markets. This geographic and sector range offers investors greater opportunities for growth given the different regional and sector dynamics. It can also help the fund reduce volatility by offsetting weaknesses in individual markets.

European equity markets have tended to increase their relative performance over the long term, as increasing Eurozone trade integration, advances in finance and increased geopolitical risks to markets outside Europe offer an attractive outlook for investing in these stocks. While there is no guarantee that the Fund will maintain its past performance, with a strategy such as the one offered by this Fund, this positive long-term growth is fundamentally supported. At least, analysts and historical data agree.

iShares MSCI Europe UCITS ETF $IMEU

The iShares MSCI Europe UCITS ETF has several characteristics that give it the potential for long-term growth.

First, it tracks the MSCI Europe Index, which measures the performance of 500 large- and mid-cap companies in 16 diverse European markets. This broad base offers investors the chance to capture growth through sector and geographic diversification. While the fund's current performance is no guarantee of future performance, over the long term this diversification should bode well for growth potential.

Second, European equities have shown the ability to increase their relative performance over the long term, particularly due to the increasing interconnectedness of European economies, advances in digital integration and market movements caused by political unrest outside Europe. Despite short-term cycles, the MSCI Europe Index has a long history of outperformance.

Thirdly, small and medium-sized European companies, in which the Fund has a large exposure, typically show higher growth potential than large companies. They can benefit more from demographic trends and demand shocks.

Despite short-term volatility related to the eurozone debt crisis or Brexit, the European economy remains resilient, with long-term momentum supported by structural reforms and continued globalisation. This should positively support long-term growth in European equities.

HSBC MSCI Europe Ex-UK UCITS ETF

The HSBC MSCI Europe Ex-UK UCITS ETF is quite specific.

It tracks the MSCI Europe ex-UK NR Index, which tracks large and mid-cap companies in 17 European countries outside the UK. This broad diversification across regions with different economic dynamics can help reduce volatility and capture growth opportunities.

According to the prospectus, non-UK equities generally show higher relative growth compared to the UK market. This is partly due to European Eurozone countries experiencing higher GDP growth than the UK due to their close trade integration.

Thirdly, the fund is focused on large and medium sized companies.These generally offer higher stable growth than small companies with greater unpredictability. The combination of growth and stability provided by large companies could support the long-term potential of this fund.

This is a relatively new ETF, hence the short history

Do you have a favorite here? Do you believe in European equities and TEF?

Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and other sources. Investing in financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.

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