Vanguard European Stock Index Fund Price & Performance (VGK)

European stocks are outperforming their U.S. counterparts in early 2025, with indices like the Stoxx 600 nearing record highs. Factors include attractive valuations, reduced U.S. trade reliance, and potential central bank rate cuts. Meanwhile, U.S. equities face headwinds from tariffs and tech sector struggles, prompting some investors to rotate portfolios toward Europe.12

The Vanguard FTSE Europe ETF has surged by 11% year-to-date, outperforming all other Vanguard ETFs. Its holdings in European giants like SAP, Novo Nordisk, and Nestlé have benefited from rising investor confidence, partly fueled by hopes of a ceasefire in Ukraine. However, geopolitical risks remain a concern for sustained growth.3

Defensive ETFs are drawing attention as market volatility rises. Indicators like the VIX and Buffett Indicator suggest caution, with investors seeking stability through cash-like ETFs and defensive funds. Rising tariffs and a tech sector downturn have heightened concerns, making these ETFs a preferred choice for risk-averse investors.4