iShares MSCI Europe Financials ETF (EUFN-Q)

ETF with high dividend It holds 30% UK banks. The Brexit story will continue, but a no-deal Brexit is off the table. Expectations for Euro banks can't get lower. EUFN pays a 5% yield. The average company trades below book value. This space is so unloved that it's time to buy.

The last six months have been a perfect storm for Europe. Resurgence of populist policies, trade tensions. Nobody believes in Europe anymore. He thinks there is good value there. Negative interest rates are certainly a headwind. All you need in the sector is a very little positive news. He likes it.

He doesn't like European banks. They face a lot of headwinds. For example, Deutsche Bank didn't pass their stress test. Look at U.S. or Canadian banks instead. Europe is 18 months behind the U.S. in the business cycle so it's growing at a slower pace.

(A Top Pick Sept. 25/17, Up 7%) Prefers European to U.S. banks. All indicators such as credit conditions point upward.

EUFN-N vs. ZWE-T. EUFN-N is an interesting way to get exposure to European banks. The risk is that the European recovery does not take hold. It appears the world is recovering and that the banks are a good place to be, although his outlook longer term is not great on them, and so he does not recommend it. He sees more risk than not. Otherwise, it is a good way to play European banks. He prefers ZWE-T for the yield and the covered calls to lower risk.

It feels weird to recommend European banks, but there are limits to linear thinking, and things can change. Europe, arguably, is much earlier in the economic cycle than the US. Importantly, credit markets are fine and confidence is up.

Euro Banks?He holds this in his personal account, because basically you are taking a shot. There are a lot of really top banks in this. Until people are confident on European banks, you are not going to get much of a move. Keep it under 5% and it might be worth a trade.

European banks. Just read an article that said if you look at the charts of European banks, you will see that the canaries are fleeing the mines. This is not something he is particularly interested in right now.

(A Top Pick July 24/13. Up 15.16%.) It was the US banks that led the market into the drink, and it was US banks that brought the market out in 2011-2012. So he expected that the European banks would be the leaders as well.