The stock market year 2025 is entering the home stretch – time for an initial assessment. While many investors are focusing on the USA or Asia, the big comeback in 2025 took place on European soil.
Above all, Spain shone with a brilliant fireworks display: the leading index IBEX 35 has increased by over 44 percent since the beginning of the year. This means that it clearly left even the tech-heavy Nasdaq (+21 percent) and the EuroStoxx 50 (+17 percent) behind.
What’s behind this rally? On the one hand, an above-average economy – Spain’s GDP is expected to grow by 2.9 percent in 2025. More crucially, however, the Spanish banks, traditionally heavily weighted in the index, experienced a historic year on the stock markets. Price gains of more than 90 percent (Unicaja and BBVA) literally drove the IBEX higher. Even after the price rally, analysts still see further potential of around 5 percent – with significantly fewer alternatives in the bond market.
Italy also surprised with a price increase of a good 27 percent in the FTSE MIB. Drivers here: undervalued exporters, growing interest from institutional investors in the real estate and tourism sectors and an increasing focus on sustainability. Despite weak growth rates (only 0.5 percent of GDP), these special effects boosted the market.
Not to forget: Eastern Europe. The Polish WIG has shone so far this year with a gain of almost 35 percent, the Hungarian stock market improved by 38 percent and the Czech stock exchange even rose by almost 49 percent. The development was driven by banks and consumer goods as well as the hope for geopolitical easing in the Ukraine conflict. Poland and the Czech Republic also benefit massively from EU funding and their proximity to German industry.
Anyone who would like to participate in this development will now find a number of easily tradable country ETFs that are also listed in Germany. Three particularly interesting options:
The Xtrackers Spanish Equity UCITS ETF 1D (ISIN LU0994505336 / WKN DBX0K8) gives investors access to the 40 largest Spanish companies via the Solactive Spain 40 index. With a total expense ratio of just 0.30 percent, the fund is one of the cheapest Spain ETFs on the market. The fund volume is a solid 277 million euros. The ETF replicates fully physically and pays dividends annually. The financial sector accounts for the largest share at 44 percent, followed by utilities at 19 percent. The performance is convincing: plus 52 percent since the beginning of the year and almost 46 percent over the year speak for themselves.
The Amundi FTSE MIB UCITS ETF Dist (ISIN FR0010010827 / WKN A0BLNG) is ideal for Italian stocks. The expense ratio is 0.35 percent annually. The portfolio includes the 40 largest Italian companies, led by the major banks Intesa Sanpaolo and UniCredit, each with a weighting of around 14 percent. The performance shows an increase of 33 percent this year and over 31 percent over the twelve months. With an attractive dividend yield of almost 3 percent and annual distributions, the fund is also suitable for income-oriented investors.
The Amundi MSCI Eastern Europe Ex Russia UCITS ETF Acc (ISIN LU1900066462 / WKN LYX02C) opens up Eastern European markets without Russia exposure. The synthetically replicating, accumulating ETF has a fund volume of EUR 294 million and charges 0.50 percent TER. The fund invests primarily in Poland, the Czech Republic and Hungary. The performance is spectacular: almost 45 percent plus since the beginning of the year, almost 40 percent over the year and over 119 percent over three years. However, investors pay the price of increased fluctuations for this return – the one-year volatility reaches a good 21 percent.
Conclusion: 2025 has so far been the year of surprise winners in Europe. Anyone who wants to invest in a geographically diversified manner will find exciting opportunities with substance in ETFs in Spain, Italy and Eastern Europe. Despite price gains already achieved, these markets could also perform above average in 2026 – especially compared to the highly valued US tech stocks.