Best Europe ETFs
European equities at valuations well below the US
ETFs tracked
60
Avg TER
0.49%
Median Yield
2.80%
European equity ETFs access roughly 14% of global market cap, a weighting that surprises investors who assume Europe is a bigger slice. The largest funds track the STOXX 600 (VGK, IEUR), the MSCI EMU for eurozone-only exposure (EZU), or the FTSE 100 for UK-specific exposure (EWU). The region is heavy in financials, consumer staples, and industrials, with a relative underweight in technology compared to the US.
The structural case for Europe rests on valuation. As of 2024 the STOXX 600 trades near 13x forward earnings, compared to the S&P 500 around 20x — roughly a 35% valuation discount. Dividend yields are also higher: broad European ETFs deliver around 3% versus 1.3% for US equivalents. That valuation gap has existed for over a decade without fully closing; you're either buying a persistent discount or the market is correctly pricing lower growth.
Currency is a second-order decision. Unhedged European ETFs like VGK expose US-dollar investors to EUR and GBP moves, which have added or subtracted 5–10% in recent years. Currency-hedged versions (HEDJ, HEWU) remove that exposure for a slightly higher fee — useful for shorter horizons or when conviction is on equities, not currency.
Beacon ranks Europe ETFs on diversification, cost, and track record. Broad continental funds typically score highest; single-country funds carry more concentration risk and tend to lag unless chosen deliberately.
Who this is for
- Globally diversified investors wanting an explicit Europe tilt
- Value-oriented investors looking for markets trading at cheaper multiples
- Not suitable as the only equity exposure for long-horizon growth portfolios
Top 10 ETFs
Browse all 60 europe ETFs
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Open screenerFrequently asked questions
- Why is Europe a smaller share of global indices than the US?
- Global equity benchmarks weight by market capitalization, and US equities have appreciated faster than European ones over the past 15 years. Europe's slower growth reflects different sector composition (less tech weight), currency effects, and demographic headwinds. The result: MSCI ACWI allocates roughly 14% to Europe vs 62% to the US.
- Should I hold a hedged or unhedged Europe ETF?
- Depends on horizon. Unhedged funds give natural currency exposure, which over 10+ year windows tends to wash out. Hedged funds (HEDJ, HEWU) remove currency risk for a small fee premium (~0.10%). Shorter horizons or accounts drawing income in USD often benefit from hedging; long-term equity investors usually do not.
- What's the difference between Europe and Eurozone ETFs?
- Broad Europe funds (VGK, IEUR) include the UK, Switzerland, and Nordic countries outside the eurozone — roughly 40–45% of the index. Eurozone-only funds (EZU, FEZ) restrict to euro-currency countries, which increases exposure to France, Germany, Italy, Spain and reduces UK and Swiss weight.
- Are European dividends taxed differently?
- European companies typically withhold taxes on dividends at source — 15–30% depending on country and treaty status. US investors can often claim a foreign tax credit to offset. Non-US investors face different treatment depending on residency. The net yield you see from a European ETF already reflects fund-level withholding.
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