##  [# Europe-Focused ETFs Rally Ahead of Tariff Deadline](/sections/data-dive/EUAD-europe-etfs-rally) 

 

# Europe-Focused ETFs Rally Ahead of Tariff Deadline

 

 

\- European ETFs posted strong gains despite a looming 30% US tariff threat.  
\- The defense sector leads with 80% year-to-date returns amid geopolitical tensions.  
\- Billions have flowed into Europe-focused funds as investors position for trade uncertainty.



 

 

 

 

 [![DJ](/sites/default/files/styles/author_image_icon/public/2024-07/5.png?itok=LA-jevm_)](/authors/dj-shaw) 

[By DJ Shaw ](/authors/dj-shaw)

 Jul 22, 2025

 Edited by: David Tony

 

 

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U.S.-listed, [Europe](/topics/europe)-focused ETFs are posting double-digit gains as investors pour billions into the funds ahead of an Aug. 1 deadline for 30% tariffs on European Union imports.

The [**Vanguard FTSE Europe ETF (VGK)**](/vgk), the largest Europe equity fund with $26.2 billion in assets, has attracted $5.8 billion in net inflows year to date while returning 23.9%, according to FactSet data. The fund's performance nearly matched the 23.4% gain of the [**JPMorgan BetaBuilders Europe ETF (BBEU)**](/bbeu) and outpaced the 7.7% return of the [**SPDR S&amp;P 500 ETF Trust (SPY)**](/spy).

The strong performance comes as Commerce Secretary Howard Lutnick warned over the weekend that the Aug. 1 deadline for baseline 30% tariffs on EU imports is fixed, creating uncertainty for European markets and the companies held by these exchange-traded funds, according to [CNBC](https://www.cnbc.com/2025/07/21/us-doubles-down-on-aug-1-tariffs-deadline-as-eu-battles-for-a-deal.html).

Europe-focused ETF flows demonstrate how investors are positioning portfolios ahead of potential trade disruptions, with some sectors seeing large gains as geopolitics shape markets.

## EUAD Defense Fund Leads Europe ETF Gains

The [defense](/topics/aerospace-defense) sector is leading the charge as Europe boosts defense spending amid the Russia/Ukraine war and a push by the Trump Administration to do so. The [**Select STOXX Europe Aerospace &amp; Defense ETF (EUAD)**](/euad) has surged 80.2% year to date, attracting $962.4 million in net flows, according to FactSet. The fund, managed by Tuttle Capital Management, tracks European companies that derive at least 50% of their revenue from aerospace and defense supply chains.

[Financial](/topics/financials) sector exposure has also proven profitable for investors. The [**iShares MSCI Europe Financials ETF (EUFN)**](/eufn) has returned just over 40% year to date while drawing $1.4 billion in net inflows, the data show. [BlackRock Inc. (BLK)](/stock/blk) manages the $4 billion fund, which tracks financial stocks across developed European markets.

Smaller, specialized funds have seen mixed investor interest. The [**First Trust IPOX Europe Equity Opportunities ETF (FPXE)**](/fpxe), which tracks the 100 largest European initial public offerings, gained 24.7% year to date but attracted only $1.5 million in net flows, according to FactSet. The fund holds positions in companies during their first 1,000 trading days after going public.

Not all Europe-focused funds have benefited from the recent rally, however. The [**JPMorgan BetaBuilders Europe ETF (BBEU)**](/bbeu) experienced net outflows of $110.4 million year to date despite its 23.4% return, the data show. The $4.3 billion fund focuses on large- and mid-cap stocks in developed European countries.

### Europe-Focused ETFs Comparison

**Fund**

[**Vanguard FTSE Europe ETF (VGK)**](/vgk)

[**First Trust IPOX Europe Equity Opportunities ETF (FPXE)**](/fpxe)

[**iShares MSCI Europe Financials ETF (EUFN)**](/eufn)

[**Select STOXX Europe Aerospace &amp; Defense ETF (EAUD)**](/euad)

[**JPMorgan BetaBuilders Europe ETF (BBEU)**](/bbeu)

**Issuer**

Vanguard

First Trust

BlackRock

Tuttle Capital Management

JPMorgan Chase

**AUM**

$26.2B

$6.3M

$4B

$1.1B

$4.3B

**Expense Ratio**

0.06%

0.7%

0.48%

0.5%

0.09%

**One-Month Net Flows**

$598.8M

$0

$54.3M

$162.6M

-$260.3M

**One-Month Performance**

3.2%

6%

4.5%

7.7%

2.8%

**Year-to-Date Net Flows**

$5.8B

$1.5M

$1.4B

$962.4M

-$110.4M

**Year-to-Date Performance**

23.9%

24.7%

40%

80.2%

23.4%

*Source: etf.com &amp; FactSet Data as of July 21, 2025*

 
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## Tariff Concerns Mount

The trade tensions have created a challenging environment for European companies and the funds that track them.

The EU had total trade with the U.S. worth 1.7 trillion euros in 2024, according to the [European Council](https://www.consilium.europa.eu/en/infographics/eu-us-trade/) as reported by CNBC. The bloc ran a surplus of around 50 billion euros, including both goods and services, which has drawn criticism from U.S. officials.



 

 

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  A graduate of The University of Texas, Arlington with a BA in Communications, DJ has covered retirement plans, mortgage news, and financial advisor…   [View Bio](/authors/dj-shaw)

 



 

 


 Related Topics  [Europe](http://www.etf.com/topics/europe) 

 [Aerospace &amp; Defense](http://www.etf.com/topics/aerospace-defense) 

 [Financials](http://www.etf.com/topics/financials) 

 [Blackrock](http://www.etf.com/topics/blackrock) 

 [Vanguard](http://www.etf.com/topics/vanguard)