While tariffs and U.S. President Donald Trump's economic policies fuel uncertainty in markets, European stocks have been a bright spot.
The resurgent interest in European ETFs reflects a sharp reversal in sentiment. Following Russia’s invasion of Ukraine in February 2022, net outflows from funds totaled $6.4 billion.
For three of the past five calendar years, investors have pulled money out of European ETFs traded on U.S. markets and invested it in domestic funds, especially in stocks of leading technology companies like Nvidia, whose valuations remain high.
“It's not that anyone is going to dump all their U.S. stocks, but they are rediscovering international stocks, and particularly European stocks, for the first time in more than a decade,” said Tim Seymour, portfolio manager of the Amplify International Enhanced Dividend ETF.
BlackRock’s Christy Akullian said the iShares MSCI Germany ETF has seen more than $1 billion in net inflows this year, doubling the fund’s total assets under management, a record for the 29-year-old ETF.
Defense stocks have been particularly popular this year as European leaders have called for more military strength. The Select STOXX Europe Aerospace & Defense ETF has attracted $469 million in assets this year, bringing its total assets to $476 million since its launch last October.
Source: Reuters
