IEUR Is One Of The Best Performing ETFs No One Knows About (Crushed VOO and SPY)

Despite increasing threats to the European Union from waves of illegal migrants, a large energy dependence on Russia, and in-fighting among its core members, the European markets have emerged surprisingly resilient in 2025. In fact, iShares Core MSCI Europe (NYSE: IEUR | IEUR Price Prediction), an ETF that tracks the MSCI Europe Investable Market Index, is sporting a YTD return of 33.85%, dwarfing the 18.7% YTD return of Vanguard S&P 500 ETF (NYSE: VOO), and 18.6% for SPDR S&P 500 ETF (NYSE: SPY). 

There’s a joke about European Heaven and Hell that goes like this: “Do you know the definitions of European Heaven and Hell?”  Answer: the definition of European Heaven is when:

• The French are the cooks.
• The English are the police.
• The Germans are the engineers.
• The Italians are the lovers.
• And the Swiss run everything. 

The definition of European Hell is when:

• The English are the cooks.
• The Germans are the police.
• The French are the engineers.
• The Swiss are the lovers.
• And the Italians run everything.

Of course, the underlying theme is that each European nation has developed a reputation for its cultural strengths and weaknesses. These cultural identities often do not play well with others whose own specialties may be in conflict with each other. As a result, the European Union has always been a tenuous assembly of disparate interests and agendas. Although classified as developed nations, the entirety of Europe’s countries have been eclipsed by China both economically and militarily, despite it ironically being classified as an “emerging nation”. 

iShares Core MSCI Europe

IEUR holds 992 stocks from 15 different European nations.

Europe is facing numerous challenges due to questionable policies that have put its citizens at considerable personal risk of harm and threaten to upend its constituent economies. Nevertheless, its market has demonstrated unexpected strength this year. As December nears the half-way mark, the relatively low profile iShares Core MSCI Europe (NYSE: IEUR) is an ETF that has started to garner attention since April, when it was trading at $53. Since then, it has climbed up over 33% and is reaching new highs at the time of this writing. 

IEUR tracks the MSCI Europe Investable Market Index and carries nearly double the number of stocks in the S&P 500. It was founded 11 years ago on June 10, 2014. An overview follows below:

Top 10 largest holdings of IEUR:

• ASML Holding – 2.87%
• AstraZeneca PLC – 1.89%
• Roche Holding AG – 1.88%
• HSBC Holdings – 1.72%
• SAP SE – 1.72%
• Novartis AG – 1.69%
• Nestle SA – 1.69%
• Siemens – 1.43%
• Shell PLC – 1.41%
• LVMH Moët Hennessy – 1.23%

Europe’s Perfect Storm of Opportunities in 2025

US dollar weakness relative to the Euro in early 2025 had a domino effect on markets, contributing to IEUR’s leap ahead of SPY and VOO.

One should have no illusions about Europe’s economy supplanting that of the US anytime soon. The advances and investment inflows that the European markets have seen in 2025 have more to do with a confluence of intertwining events that have been coincidentally serendipitous for Europe. Here are three examples:

Uncharted US Tariff Policy Waters

President Trump’s election victory in November 2024 ushered in a number of geopolitical concerns. Democrats, in particular, objected to the fraud, theft, and mismanagement of taxpayer dollars by federal government agencies that were discovered by Elon Musk and DOGE. The subsequent reciprocal tariff policy announced in late March, 2025 caused markets around the world to sell off out of the uncertainty emerging on financial, military, and political fronts in response to these new policy initiatives. 

Currency Weakness

The US dollar underwent one of its severest downturns in the first half of 2025 – a drop of 11%. The rise of the BRICS (Brazil, Russia, India, China and South Africa) economic coalition, which fostered de-dollarization and billions in cross-border trading in BRICS members’ own sovereign currencies, further undermined the US dollar’s reserve currency status. Federal Reserve chairman Jerome Powell’s partisan refusal to cut rates while the rest of the industrialized world proceeded to do so put the US in a position of having to play catch-up during Q3 after a rate cut in the US came many months later. 

Europe – The Right Place at the Right Time

As the bulk of the Trump tariff policies were primarily aimed at China, India, S. Korea and Taiwan at the start, European markets were judged to be comparatively less volatile, and started receiving influxes of institutional investment funds early in 2025. In fact IEUR’s 33% bull run started in early April, the nadir of the US dollar’s fall and the bottom of the S&P 500’s sell off. The heavy weighting of the Magnificent 7 AI tech stocks as the primary engine driving the S&P 500 has also led investors to look more towards Europe to hedge their gains with greater diversification risk mitigation. Europe’s greater weighting towards financials and industrials appealed to many who fear that AI is the next dotcom bubble 

Europe can still keep on its current strong market trajectory, provided it can keep its internal problems from getting out of hand. However, the continued Ukraine war issue may impact Russian energy exports to Europe this winter, and escalated energy prices can severely eat into Europe’s market gains in just a few months. This and other geopolitical developments bear future monitoring.