iShares MSCI Europe Small-Cap ETF

IEUS

Valor de mercado US$ 165 mi

Europe shows tentative signs of improvement, but the recovery remains uneven. AI investment is increasingly influencing U.S. capital spending and trade.

Higher interest rates in some emerging Asian banking sectors will likely lead to slower credit growth by the end of 2027. Serbia's interest rate cap order will expire in September, and expectations of this are likely to boost credit growth before expiration.

As Europe confronts a new energy crisis, we explore key measures to strengthen energy security beyond simply lowering energy bills, and the potential implications for business leaders. Europe now relies on a wider range of suppliers, but paradoxically, the new geopolitical situation still leaves Europe vulnerable.

AI-related equity jitters are unlikely to be resolved overnight and eurozone government bonds could actually come out as a winner. Relative to euro rates, US equity volatility is reaching highs similar to previous crisis periods. A global rebalancing of portfolios could see significant demand for euro rates, mitigating the upward rate pressure.

Europe's macro outlook is shifting. After years of fiscal restraint and fragmented policy, the region is entering a new chapter - one centered on pro-growth fiscal policy, energy security, and capital-market reform.

French bond yields have risen significantly against German bunds and are likely to stay elevated or potentially move higher. The European Central Bank still appears to be a reliable backstop against excessive bond turmoil.

It's true that it's been a challenging year for U.S. small-cap ETFs. Using the iShares Russell 2000 ETF (IWM) as a benchmark for the category, we immediately see that 2025 has been marked by red ink.

Europe ETFs have been outperforming the S&P 500 due to cheaper valuations, upbeat economic growth, a more sustainable earnings pattern, less tech exposure, and cooling inflation.

Plans to increase defense and infrastructure spending offer compelling economic benefits for Germany's lagging manufacturing sector. The US seems to be dramatically reducing spending through its Department of Government Efficiency (DOGE) effort.

A continent-wide defense bump, didn't exactly catch the market by surprise, but markets could keep running.