Investors pour record $11 billion into Europe ETFs to 'Make Europe Great Again'
April 1 (Reuters) - U.S. investors poured a record $10.6 billion into exchange-traded funds focused on European stocks in the first quarter, seven times the inflows recorded a year earlier, according to data from BlackRock (BLK.N), opens new tab.
As U.S. President Donald Trump's tariffs and economic policies fuel uncertainty across markets, European equities have emerged as a bright spot. Tim Seymour, founder and chief investment officer of Seymour Asset Management, dubbed the burgeoning trend Make Europe Great Again, or MEGA.
The resurgent interest in European ETFs reflects a sharp reversal in sentiment. Since Russia's invasion of Ukraine in February 2022, the funds had seen net outflows of $6.4 billion.
"It's a really massive swing," said Kristy Akullian, head of iShares Investment Strategy at BlackRock.
In three of the last five calendar years, investors steered money out of European ETFs that trade in U.S. markets and into domestic funds, especially dominant technology stocks like Nvidia (NVDA.O), opens new tab, whose valuations remain elevated.
"It's not that anyone is going to dump all their U.S. stocks, but they're rediscovering international stocks, and Europe in particular, for the first time in more than a decade," said Seymour, who is also a portfolio manager of the Amplify International Enhanced Dividend ETF (IDVO.P), opens new tab.
The breakout for Europe is different from others in recent years, he added.
"Europe is deregulating at a faster clip than the U.S. is, the German fiscal announcements were historic," Seymour said, citing the massive spending plans of Friedrich Merz, leader of Germany's conservatives and its likely future chancellor.
BlackRock's Akullian said the iShares MSCI Germany ETF (EWG.P), opens new tab has seen more than $1 billion of net inflows so far this year, doubling the fund's total assets under management. That marked a record for the 29-year-old ETF, she said.
Defense stocks in particular have drawn investor interest this year, given calls by European leaders for boosting their militaries. The Select STOXX Europe Aerospace & Defense ETF (EUAD.Z), opens new tab has attracted $469 million in assets this year, bringing total assets to $476 million, after it launched last October.
"There is quite a bit of genuine enthusiasm around what's happening in Europe," said Ronald Temple, chief market strategist for Lazard's financial advisory and asset management businesses. U.S. policy moves may have "jolted Europe out of its paralysis", he said.
Some warned the rally may run out of steam.
"For this to be more than just a tactical trade, we need to see follow-through, for earnings growth in Europe to really pick up," said Akullian.
Not all European countries are benefiting from the optimism. ETFs that invest in British stocks, such as the iShares MSCI United Kingdom (EWU.P), opens new tab, continue to see net outflows.
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'Our superiors would say, 'Torture them, don't let them sleep at night. Throw them a party… put them in a grave if you want to, bury them alive'. 'When they'd call me to go and torture them, the prisoners would go back to their cells bloody and exhausted.' 'Execution parties' 15 Compartments uncovered in the prisons were filled with shoes belonging to executed prisoners Credit: Getty 15 Bodies of the dead were taken to military hospitals where their deaths were recorded as 'heart and respiratory failure' Credit: Getty Occasionally a prisoner would be dragged out of their cell, finally receiving a respite from the torture. But they were on their way to a secret trial - and death was the usual sentence. 'On Wednesday mornings, we'd have an 'execution party'," Hussam recalled. 'Our role during executions was to place the rope on the prisoner - only an officer could push the chair. 'One time, the chair was pushed, but after 22 minutes he didn't die. So I grabbed him and pulled him downwards, so another guard who was bigger and stronger said, 'Go I will do it.' 'Before he died he said one thing: 'I'm going to tell God what you did'.' The bodies of the dead - be it from execution, torture, or disease - were then taken to military hospitals where their deaths were registered. 'Most of the bodies suffered acute weight loss, resembling a skeleton,' said Kamal, an army nurse. 'Most of them suffered from skin lesions and rashes due to lack of hygiene - and most of them had torture marks." He added: 'It was forbidden to record the cause of death as torture. Even those killed from gunshots were recorded as heart and respiratory failure.' All the decision makers who had a role in oppressing the Syrian people escaped, and are now in hiding Shadi With the bodies piling up, mass graves were the only solution. At least 130 grave sites have been found across Syria so far - but dozens more are believed to be out there, known only to those who dug them out. There is little hope of identification for the thousands dumped there. Many of the guards and officers defected from Assad's regime, joining the rebels or fleeing the country. By 2019, the rebellion had largely been suppressed. Shadi and his brother were released at last, fleeing to exile in Turkey. Then, in December this year, rebel forces overwhelmed Damascus and Assad fled the country and claimed asylum in Russia. With the collapse of the regime, Shadi set to work helping others locate their missing friends and family. But for many there is little hope of ever finding out what really happened to them. 'Everyone, the detainees, and families of the missing, should keep talking about this,' he said. 'All the decision makers who had a role in oppressing the Syrian people escaped, and are now in hiding. 'They've left everybody to pick up the pieces - to deal with what they left behind.' Surviving Syria's Prisons airs tonight on BBC Two at 9pm.
