The iShares Europe Financials ETF Outperforms First Trust Bank ETF on Yield, Cost, and Performance
Key Points
The iShares MSCI Europe Financials ETF offers a lower expense ratio and a higher dividend yield than the First Trust Nasdaq Bank ETF.
The iShares MSCI Europe Financials ETF has significantly larger assets under management and lower volatility as measured by beta.
First Trust Nasdaq Bank ETF provides concentrated exposure to U.S. banks, whereas iShares MSCI Europe Financials ETF diversifies across 84 European holdings.
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The iShares MSCI Europe Financials ETF (NASDAQ:EUFN) provides broad exposure to European financial markets at a lower cost and higher yield than the more concentrated First Trust Nasdaq Bank ETF (NASDAQ:FTXO).
Investors looking for financial sector exposure may find themselves choosing between domestic specialization and international breadth. While First Trust Nasdaq Bank ETF isolates U.S. banks using a liquidity-weighted approach, iShares MSCI Europe Financials ETF provides a window into the banking and insurance giants of developed European economies.
Snapshot (cost & size)
| Metric | FTXO | EUFN |
|---|---|---|
| Issuer | First Trust | iShares |
| Share price (as of 8/27/26) | $41.76 | $42.19 |
| Expense ratio | 0.6% | 0.49% |
| 1-yr return (as of 8/27/26) | 18.4% | 31.6% |
| Dividend yield | 1.7% | 3.9% |
| Beta | 1.03 | 0.85 |
| AUM | $304 million | $4.3 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The iShares MSCI Europe Financials ETF is the more affordable option with an expense ratio of 0.49%, compared to 0.6% for the First Trust Nasdaq Bank ETF. Additionally, the iShares fund offers a significantly higher payout for income-focused investors.
Performance & risk comparison
| Metric | FTXO | EUFN |
|---|---|---|
| Max drawdown (5 yr) | (46.6%) | (35.5%) |
| Growth of $1,000 over 5 years (total return) | $1,461 | $2,647 |
What's inside
The iShares MSCI Europe Financials ETF focuses on developed European markets, with 98% of its portfolio in financial services and minimal weights in technology and industrials. It holds 84 stocks, and its largest positions include HSBC Holdings at 9.8%, Banco Santander at 5.6%, and Allianz at 5.3%. It was launched in 2010. The iShares MSCI Europe Financials ETF has paid $1.65 per share over the trailing 12 months, which on its recent ~$42.19 share price works out to a 3.9% yield.
The First Trust Nasdaq Bank ETF is concentrated entirely in the financial services sector, specifically targeting U.S. institutions. It holds a narrower basket of 42 securities, and its largest positions include Bank of America at 8.8%, Citigroup at 8.7%, and JPMorgan Chase & Co. at 8.3%. It was launched in 2016. The First Trust Nasdaq Bank ETF has paid $0.73 per share over the trailing 12 months, which on its recent ~$41.76 share price works out to a 1.7% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
The iShares Europe Financials ETF outperforms the First Trust Nasdaq Bank ETF in nearly every category. Its much larger portfolio of assets under management provides stability and liquidity, while its holdings by number of stocks provides diversity. It charges a lower expense ratio and has generated more growth over the last one and five years, with a smaller maximum drawdown. Income investors will also be pleased with its dividend yield, which surpasses FTXO's.
Holding EUFN gives you access to a basket of banks and financial institutions in developed European markets. As part of a diversified portfolio, it could provide both growth and income while also serving as a hedge against U.S.-specific volatility. Of course, there are risks to holding European financial companies, including regional economic uncertainty, global trade issues, and political uncertainty including the tariff policies of the U.S.
You may also still want to hold some of the U.S. financial powerhouses found within the First Trust ETF, but it may be worth exploring other U.S.-focused financials funds or selecting a few institutions you want to follow and hold individually to fill the gaps in your portfolio.
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Citigroup is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. HSBC Holdings is an advertising partner of Motley Fool Money. Sarah Sidlow has positions in Bank of America. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.
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