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Invesco has unveiled a European equal weight ETF as assets flood into European equity strategies.
The Invesco MSCI Europe Equal Weight UCITS ETF (MEEQ) is listed on Deutsche Borse, Euronext Milan and SIX Swiss Exchange with a total expense ratio of 0.2%.
It tracks the MSCI Europe Equal Weighted index, which offers exposure to large- and mid-cap stocks across Europe and weights all constituents equally at each rebalance date.
Although it is not the first European equal weight ETF—the $60 million VanEck European Equal Weight Screened UCITS ETF (TEET) came to market in 2014—it is the first to track the MSCI Europe Equal Weighted index.
Equal Weight ETFs in Focus
The launch comes in the wake of strong European equity performance this year, and the continent has seen an uptick in demand with eurozone and Europe equity ETFs drawing in €2.6 billion of combined inflows in January.
Although not as concentrated as U.S. equities, the top-10 holdings of the parent MSCI Europe index comprise more than 20% of its weight, so MEEQ represents an alternative for investors worried about concentration risk.
Gary Buxton (pictured), head of EMEA and APAC ETFs at Invesco, said: “Equal weight strategies started growing in popularity when mega-cap valuations began looking stretched, with concentration in the largest holdings at multi-decade highs. This demand has broadened from investors first wanting to reduce concentration risk in their U.S. equity exposure to now considering an equal weight approach for other core exposures.”
Invesco was also first to market in Europe with an MSCI World equal weight ETF in September last year.
More broadly, equal weight strategies were popular in 2024. The Xtrackers S&P 500 Equal Weight UCITS ETF (XDEW) saw $7.2 billion of inflows across 2024, according to data from ETFbook, and pulled in $750 million of net new assets in September 2024 alone.
While investors have been leaning toward reducing concentration risk, index provider STOXX recently announced the launch of an uncapped version of the DAX index, allowing large-caps to take up even more space in the index.
This article was originally published in etf.com sister publication ETF Stream.