European Shares ETF performance in 2025

Index trend and valuation

• The European Shares fund tracks the MSCI Europe Index, which delivered mid- to high-teens returns in 2025, outperforming some global peers.
• European equities benefited from lower starting valuations and improving investor sentiment.

 

Key drivers of performance

• Financials, industrials, defence, and energy stocks were important contributors.
• Increased fiscal spending, particularly on infrastructure and defence, supported earnings expectations.
• Supportive central bank signals helped underpin market confidence.

 

Periods of volatility

• The index experienced fluctuations tied to global economic developments and currency movements.
• Despite volatility, overall performance remained positive for the year.

 

Sector and broader context

• Europe’s more balanced sector exposure helped performance compared with more technology-heavy indices.

 

Summary

In 2025, European equities experienced a notable rebound, supported by attractive valuations, sector breadth, and fiscal support. The MSCI Europe Index offered diversification benefits and competitive returns relative to US-focused benchmarks.