Jasmine Birtles
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Best European ETFs to Buy in 2025
Ruby Layram
13th May 2025
Looking to spread your investing wings beyond the UK and the US? You might want to take a peek at Europe. From booming German engineering firms to luxury French fashion houses, European stocks are having a bit of a moment in 2025. And one of the easiest ways to get involved? European ETFs.
If you’re wondering what on earth an ETF is (never mind a European one), don’t worry — we’ll break it all down for you below.
What Is a European ETF?
ETF stands for Exchange-Traded Fund– a fancy way of saying it’s a basket of investments (like shares or bonds) that you can buy and sell on the stock market just like a regular share. A European ETF is simply an ETF that gives you exposure to European companies.
Rather than picking and choosing individual European stocks, you can invest in one of these ETFs and instantly get a little piece of hundreds of companies across the continent. It’s quick, it’s easy, and it spreads your risk- what’s not to like?
Why Invest in European ETFs in 2025?
For a while, European markets lagged behind their American counterparts. But 2025 is shaping up to be a bit different.
Here’s why investors are paying more attention to Europe:
- Stronger-than-expected economic growth across major European countries.
- Attractive valuations: European stocks are still relatively cheap compared to the US.
- Strong earnings from sectors like luxury, green energy, and financials.
- Diversification: If all your money’s tied up in UK or US shares, adding some Europe into the mix could reduce your overall risk.
In short, Europe’s having a bit of a glow-up. And ETFs are a simple way to tap into that.
The Best European ETFs for UK Investors (May 2025)
Here are some top-performing and low-cost European ETFs to keep on your radar this year:
1. HSBC MSCI Europe UCITS ETF (Ticker: HMEU)
This ETF offers broad exposure to developed markets across Europe, making it a great way to invest in a little bit of everything- from German industrials to French luxury.
It returned 11.67% in GBP as of January 2025, and with an annual fee of just 0.10%, it’s one of the cheapest options out there.
A brilliant choice for cost-conscious investors who want straightforward access to European markets.
2. iShares Core MSCI Europe UCITS ETF (Ticker: IMEU)
A solid and dependable fund, the iShares Core MSCI Europe ETF gives you exposure to some of the continent’s largest companies. It delivered a return of 11.66% in GBP and charges a low annual fee of 0.12%.
Ideal for beginners and long-term investors alike, it’s a reliable way to add European equities to your portfolio.
3. Vanguard FTSE Developed Europe ex-UK UCITS ETF (Ticker: VERX)
If you’re already investing in UK shares and want to avoid doubling up, this ETF is worth a look. It focuses on developed European markets excluding the UK, giving you a cleaner slice of continental Europe.
With fees at just 0.10%, it’s another low-cost, long-term option for broad diversification beyond Britain.
4. iShares MSCI Europe Small-Cap UCITS ETF (Ticker: IEUS)
Looking for something with a bit more growth potential? This ETF tracks smaller European companies- the ones that are often more agile and high-growth, though they can be a bit more volatile.
It’s delivered a strong one-year return of 28.79%, but comes with slightly higher fees at 0.40%. A good pick for investors who want to go beyond the blue chips and into the up-and-comers.
5. Amundi STOXX Europe 600 UCITS ETF (Ticker: C6E)
This ETF gives you exposure to 600 companies across 17 European countries, offering serious diversification in one neat package.
With an incredibly low fee of just 0.07%, it’s one of the cheapest ways to invest in European equities.
It stands as a fantastic option for anyone looking to keep costs down while still accessing a wide mix of industries and markets.
How to Invest in European ETFs (as a UK Investor)
Investing in European ETFs is much easier than it sounds. Just follow these simple steps:
Open a Stocks and Shares ISA or investment account with a broker like InvestEngine, Vanguard, AJ Bell, Hargreaves Lansdown or Interactive Investor.Search for the ETF using its ticker (those codes above, like IMEU or VERX).Click ‘buy’, choose how much you want to invest, and away you go!
Top tip: Holding ETFs inside a Stocks and Shares ISA means you won’t pay tax on dividends or capital gains. Win-win!
Things to Keep in Mind Before You Invest
Before you go ETF-hunting, here are a few things worth thinking about:
Currency risk: A lot of these ETFs are priced in euros, so the value can be affected by how the pound is doing. Some platforms offer GBP-hedged versions if you want to avoid this.
Diversification: Don’t go all-in on one region. Europe’s great, but mix it up with UK, US, and global ETFs too.
Long-term mindset: European ETFs (like most growth investments) are best held for the long haul. Expect a few bumps along the way!
Final Thoughts
If you’re looking to add some international flavour to your portfolio, European ETFs could be a smart move in 2025. They’re low-cost, easy to buy, and give you access to some of the continent’s biggest and brightest companies.
Just make sure you’ve got a plan, keep your investments diversified, and, as always, only invest what you can afford to leave alone for a while.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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