U.S. investors Pour $10.6 Billion into European Stock ETF
BlackRock data shows that US investors allocated an unprecedented $10.6 billion on European stock-focused exchange-traded funds in the first quarter, seven times larger than the first quarter of 2024.
European equities are green amid U.S. President Donald Trump’s changes to tariffs and economic policies, which increase uncertainty across all markets.
The skyrocketing interest in European ETFs showcases a significant shift regarding likelihood. The funds accumulated $6.4 billion in net losses after Russia invaded Ukraine in February 2022.
“In just a matter of timeline, this is tremendous,” stated Kristy Akullian, head of iShares Investment Strategy at Blackrock. Investors diverted funds from domestic-based European ETFs to overvalued stocks such as Nvidia.
Seymour, a portfolio manager for the Amplify International Enhanced Dividend ETF, in an interview with Reuters, said, “It’s not that anyone is going to dump all their American stocks, but they’re rediscovering international stocks, and Europe in particular, for the first time in more than a decade.”.
He highlighted that the European breakout is distinct from others in recent years. Europe is deregulating more quickly than the United States.
The fiscal announcements made by Germany were historic,” Seymour stated, referring to the enormous spending plans of Friedrich Merz, the conservative leader and probable future chancellor of Germany.
According to Akullian of BlackRock, the iShares MSCI Germany ETF has doubled its total assets under management this year with over $1 billion in net inflows. According to her, that was a record for the 29-year-old ETF.
Investor interest in defense stocks has increased this year because European leaders have called for strengthening their militaries. The Select STOXX Europe Aerospace and Defense ETF has brought in $469 million in assets since its launch last year.
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