Vanguard FTSE Europe ETF Outshines Growth Rivals in 2025

In 2025, the Vanguard FTSE Europe ETF has outperformed others in Vanguard's lineup. Its significant gains result from strong performances of European stocks, indicating a substantial comeback after a tough 2024. Investors should weigh potential geographical diversification benefits against the risks involved.

Date: 23-02-2025

AI Rating: 7

Current Performance and Comparison

The Vanguard FTSE Europe ETF has shown a remarkable increase of approximately 11% year-to-date, making it a more lucrative choice compared to Vanguard's S&P 500 Growth ETF, despite the latter's strong performance in 2024. This shift in performance showcases the volatility and ever-changing landscape of the ETF market.

Key Stocks Driving Growth

The ETF's resurgence can be attributed to several leading European companies such as SAP, Roche, AstraZeneca, Nestlé, and HSBC Holdings, all of which have experienced notable increases in their stock prices. The rising expectations for a ceasefire in Ukraine also positively influenced European stocks, further stabilizing and driving the growth of the ETF.

Cost-Effectiveness

The Vanguard FTSE Europe ETF boasts a low annual expense ratio of 0.06%, significantly lower than the average of 0.93% for similar funds. This cost effectiveness makes it an attractive investment option, allowing for better overall returns over time.

Long-Term Performance

Historically, since its inception, the asset showed a mere 5.14% average annual return, starkly underperforming compared to the S&P 500's returns. While the current year's performance is promising, it remains crucial for investors to consider the long-term performance history of the ETF before making any decisions.

Investors are cautioned that while the ETF is performing well now, this might not persist in the future, especially if geopolitical issues arise or trade tariffs are introduced.

Stocks: SAP ASML Novo Nordisk NESTLE Roche Holding AG AstraZeneca HSBC