Investors can consider European ETFs due to uncertain outlook for the region

From Zacks Investment Research: 2025-01-03 18:30:23

The Eurozone economy faces challenges from political instability, geopolitical tensions, and uncertainty surrounding the policies of the incoming Trump administration. Risks to growth are skewed to the downside, with European markets underperforming global counterparts. Global fund managers are underweight on European equities, not expecting them to outperform in 2025. The region’s economy is closely tied to global markets, with uncertainties in key trading partners like the US and China impacting European markets. The proposed tariffs by President-elect Trump could further impact the EU economy, with potential GDP reductions and inflationary pressures.

The European economy’s outlook is linked to global markets, with uncertainties in key trading partners affecting European markets. The slowdown in China has contributed to underperformance in European stocks, but economists expect a recovery in 2025. Political instability in France and Germany could negatively impact European markets, with assets in the Eurozone carrying a higher risk premium. The outlook for European markets in 2025 remains challenging due to various economic and political factors.

Investors can consider ETFs with exposure to the Eurozone amidst the bleak outlook for the region. Vanguard FTSE Europe ETF, iShares MSCI Eurozone ETF, iShares Core MSCI Europe ETF, JPMorgan BetaBuilders Europe ETF, and SPDR EURO STOXX 50 ETF are some options to consider. These ETFs have exposure to European markets and have seen declines since late 2024, offering potential opportunities for investors amidst the challenging economic environment.



Read more at Zacks Investment Research: What’s Next for Europe’s Economy? ETFs to Consider – January 3, 2025