This is partly because the euro zone economy has been growing robustly, masking the long-standing structural and governance problems that continue to bedevil Europe’s shaky monetary union.
On Wednesday, the publication of a purchasing managers’ index survey by IHS Markit, the data provider, showed that the bloc is growing at a quarterly pace of nearly 1 per cent, the fastest clip since 2011.
Yet the much more uncertain political environment in Europe’s leading economy comes just when the ECB is preparing to withdraw monetary stimulus, probably at the end of this year.
What’s more, the main candidate to replace Draghi when his term expires in September 2019 is Jens Weidmann, the hawkish head of Germany’s central bank and a fierce critic of QE.
Yet it is mainly because Europe is slowly moving into the post-Merkel and post-Draghi era.
Often, the quality factor as it applies to dividend stocks places more merit on a company's ability to continue paying and growing its dividend with less regard for high yields.
This one-two punch of “Super Mario” and “Mutti”, as Draghi and Merkel are often nicknamed, put a stop to the euro zone debt crisis and paved the way for the bloc’s impressive recovery.
Yet over the past couple of years, and particularly since Germany’s election in which Merkel’s party suffered its worst result since 1949 and the far-right Alternative for Germany party gained nearly 13 per cent of the vote, the Merkel-Draghi effect has begun to lose its potency.
(See also: .) OEUR, which hit record highs on Monday, has a geographic lineup that is familiar to dividend investors experienced with European equities. At 13.7 percent, France is the largest Eurozone weight in OEUR.
Overall, the ETF features exposure to 14 countries, nine of which are Eurozone nations.