If you’ve already dipped your toes into Aussie or US shares, you might be thinking – what’s next? For some investors, the answer is Europe. It’s home to many of the world’s biggest brands, strong economies, and industries you won’t always find on local markets – from luxury fashion and cars to green energy and global banking.
In this guide, we’ll break down why people invest in Europe, what makes it different, and how you can get started – whether you want to keep things simple with an ETF or dig deeper into individual shares.
Why invest in European markets?
Europe might not be the first place that springs to mind when you think about investing, but it has a lot going for it. Here are a few reasons investors are looking to the region:
- Well-established economies – Countries like Germany, France, and the UK (despite the changes brought on by Brexit) have long histories of economic strength and stability.
- A good mix of industries – Think French luxury fashion, German engineering, Dutch tech, and Scandinavian green energy.
- Sustainable business practices – European companies often lead the way on environmental and social standards .
- Global names you know – Brands like Nestlé, Siemens, LVMH, and ASML are based in Europe.
- Currency variety – Investing in Europe gives you exposure to the euro, British pound, Swiss franc and more, which can help balance things out when the Aussie dollar shifts.
- Potential value – European stocks can sometimes be cheaper than their US counterparts, which might mean more room to grow.
And unlike emerging markets , Europe generally offers more stability and transparency, which can be helpful if you're after lower volatility or the potential for long-term certainty. It also gives you access to a broader range of consumer behaviour, innovation, and public policy directions than you'd get by staying close to home.
Different ways to invest in European markets
There’s more than one way to add Europe to your investment mix. Whether you want to take a hands-off approach or choose your own companies, here are your main options.
1. Invest in Europe-focused ETFs
If you’re after a simple way to get exposure to European companies, an exchange-traded fund (ETF) could be a worthwhile option to consider.
Why go with an ETF?
- Instant diversification – Most ETFs hold dozens (or even hundreds) of shares across different countries and industries.
- Generally lower risk than picking one company – If one business struggles, others in the fund can help balance things out.
- Easy to buy – Many European ETFs are listed on the ASX or US exchanges, and you can invest in them through brokers like Pearler.
A few popular European ETFs
(NOTE: these are just examples – not personal recommendations!)
- BetaShares Europe Currency Hedged ETF (HEUR) – Tracks Europe’s big markets but cushions you from currency movements.
- iShares Europe ETF (IEU) – Offers exposure to large and mid-cap companies in developed European countries.
- VanEck FTSE Europe Shares ETF (VEQ) – Provides access to large- and mid-cap European companies, traded on the ASX.
- Vanguard FTSE Europe ETF (VGK) – Offers exposure across the region.
- SPDR EURO STOXX 50 ETF (FEZ) – Covers 50 of Europe’s largest blue-chip companies.
You can also invest in ETFs that track specific European indexes in specific countries. For example, the FTSE 100 index focuses on the largest companies listed in the UK, such as Shell, HSBC, and Unilever.
Before choosing an ETF, think about what you're hoping to get from your investment. Do you want broad market exposure, or are you looking to target specific industries, like tech or sustainable energy? The right ETF for you depends on what you're trying to achieve.
2. Hedged vs. unhedged ETFs: what’s the go?
When investing overseas, you’ll often see two types of ETFs: hedged and unhedged .
- Hedged ETFs aim to reduce the impact of exchange rate changes. That means your returns remain in Aussie dollars.
- Unhedged ETFs let you ride the ups and downs of foreign currencies. If the AUD drops, your investment could go up in value. But if it climbs, you might get less in return.
Neither is “better” – it depends on how much currency risk you're happy to take on. If you're investing for the long term, short-term currency swings might not worry you. But if you're more risk-averse, hedging could bring peace of mind.
Learn more in our guide to currency hedging .
3. Buy individual European shares
If you’ve got your eye on a specific company – maybe ASML, Ferrari, or Nestlé – you can invest directly in European shares. It takes a bit more effort but gives you more control.
Here’s what to know:
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Use a broker with access to European markets.
Not all brokers do – so check whether they support places like:
- London Stock Exchange (UK)
- Euronext (France, Netherlands, etc.)
- Frankfurt Stock Exchange (Germany)
- SIX Swiss Exchange (Switzerland)
- Nordic markets (Sweden, Denmark, Finland)
- Keep currency and tax in mind. You’ll be buying in euros, pounds, or francs, and your dividends might be taxed overseas. It’s worth checking if Australia has a tax agreement with the country you're investing in.
- Stay up to date. Politics, trade deals, and EU rules can affect European markets. Knowing what’s happening can help you make smarter calls.
Also, be prepared for different regulations and reporting standards. European companies may publish reports differently to Australian ones, so you'll want to make sure you're comfortable reading and understanding financial statements before diving in.
4. Invest in managed funds with a European focus
Prefer to leave it to professionals? A managed fund might be for you.
Why people go with managed funds:
- Professional management – Fund managers do the research, pick investments, and adjust the strategy if needed.
- Broader exposure – Some funds include not just shares, but also bonds or infrastructure across Europe.
- Chance to beat the market – Unlike most ETFs, managed funds try to outperform their benchmarks.
Things to keep in mind:
- Higher fees – You’re paying for active management, so the costs are usually higher.
- Less flexibility – Managed funds don’t trade on the stock exchange, and withdrawals might take a few days.
- No guarantees – If the manager makes poor choices, the fund might not perform as well as a simple ETF.
This option could suit someone who wants exposure to Europe but doesn’t have the time or confidence to choose specific investments themselves.
5. Look into LICs or ETMFs
These options sit somewhere between ETFs and managed funds.
- Listed investment companies (LICs) trade like shares on the ASX but invest in a mix of European assets.
- Exchange-traded managed funds (ETMFs) are similar to managed funds but can be bought and sold like ETFs.
Some investors like LICs for their transparency and long-term approach. ETMFs, on the other hand, offer more liquidity while still giving you the benefit of active management. Either could work well depending on your investment goals and preference for control.
What are the risks?
Every investment comes with risk, and Europe is no different. Here’s what to watch out for:
- Politics and regulation – The EU has a lot of moving parts. Things like Brexit or changing trade policies can affect markets.
- Currency movements – If the AUD strengthens against the euro, it can drag down your returns on unhedged investments.
- Demographic trends – An ageing population in parts of Europe could slow growth in some industries.
- Complex regulations – Each country has its own rules, and navigating them can be tricky for international investors.
- Geopolitical tensions – Events like the war in Ukraine have real market impacts, so staying informed matters.
It’s also worth keeping an eye on economic growth and interest rate trends set by the European Central Bank and other regional banks. Like in Australia, these can shape how industries and companies perform over time.
Find what fits your style
Investing in Europe can be a great way to spread your risk, access new industries, and add global brands to your portfolio. But as always, there’s no one-size-fits-all approach.
You might prefer a hands-off ETF, enjoy researching individual shares, or want to trust a fund manager to do the work. What matters most is that your investments line up with your long-term goals, risk tolerance , and personal values.
And if you're ever unsure, chatting with a licensed financial adviser can help you figure out the right next step.
Happy investing – or as they say in Germany, viel erfolg !
