European bank ETFs faced volatility due to Trump's tariffs, but still viewed positively overall

From Morningstar: 2025-04-23 05:16:00

European bank equities have been performing well but faced a selloff due to Trump’s tariffs announcement. Analysts see positives in the selloff, with European banks showing higher ratings. Concerns remain about profitability and bad debts. Despite recent volatility, experts believe European banks are financially stable compared to previous crises.

In the search for European bank equity ETFs, Morningstar screened 28 ETFs in the financial services category. Four ETFs focused on European banks made the list, none with Gold or Silver Medalist Ratings. The ETFs track different benchmarks and have varying performances compared to their benchmarks and peer groups.

Among the ETFs, iShares STOXX Europe 600 Banks UCITS ETF (EXV1) rose 36.79% in the past year, outperforming the average fund in its category. iShares MSCI Europe Financials Sector UCITS ETF (ESIF) gained 30.7%, while SPDR® MSCI Europe Financials UCITS ETF (STZ) rose 30.76% over the past year. Xtrackers MSCI Europe Financials Screened UCITS ETF 1C (XS7R) increased 27.82% over the past year. 1. The unemployment rate in the US fell to 5.8% in May, with employers adding 559,000 jobs. This is a positive sign for the economy as it continues to recover from the impact of the pandemic.

2. A new study found that the Pfizer-BioNTech COVID-19 vaccine is 88% effective against the Delta variant. This provides reassurance as the variant continues to spread globally.

3. The Tokyo Olympics will allow up to 10,000 local fans to attend events, despite concerns about the spread of COVID-19. Strict safety measures will be in place to protect athletes and spectators.

4. The European Union has approved the use of the Pfizer-BioNTech vaccine for children aged 12-15. This decision will help boost vaccination rates and protect younger populations from the virus.

5. Tesla announced plans to open its first European gigafactory in Berlin. The factory will produce batteries, powertrains, and vehicles, creating thousands of jobs in the region. This move signals Tesla’s commitment to expanding its global presence.



Read more at Morningstar: The Best European Bank ETFs for Investors