How to play Europe with minimal risk

Theo Casey examines which of Europe's markets looks most promising, and how to play them without getting your fingers burned.

As Goldman Sachs put it in a recent report, "economic differentiation is a key theme across Europe for 2010". In other words, you need to pick and choose where you invest, rather than whacking all your money into a generic European fund. The good news for investors who favour funds over individual stocks, is that you can now buy exchange-traded funds (ETFs) to track pretty much any European index you care to mention.

So which countries look most promising? If you're an income investor, then Spain's Ibex index at first looks to be the most obviously attractive play. The dividend yield on the Spanish index is around 4.7%, compared to the FTSE 100's 3.2%, for example. And it can be tracked with the Lyxor Ibex 35 ETF.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Theo Casey

Theo is a former financial writer and editor, having written for reputable titles such as Euromoney Institutional Investor and Redwood Publishing. He has also appeared on-screen with Al Jazeera, BBC and CNBC and on MoneyWeek Theo covered funds, share tips and stockmarkets. He also edited the country's oldest newsletter with Lord Rees-Mogg for four years. Theo now runs his own content marketing agency for financial companies, and he is a seasoned CISI-qualified investment adviser.