TSM - EWN: High Concentration Risk Warrants Investor Caution

• EWN is a relatively popular exchange-traded fund that invests in Dutch equities.
• The Netherlands is not the most obvious place to invest for U.S. investors, but it is home to one of the most successful tech companies.
• ASML is a significant holding of EWN. And while it has performed well (both its business and its stock price), there is growing concentration risk.
• EWN is, overall, probably fairly valued. Given that U.S. equities look pricier, EWN offers diversification value.
• However, the level of concentration risk should make one hesitate. Overall, I am neutral on EWN and do not expect out-performance in the medium- to long-term (next 12 months).

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