While Australian bank stocks had a muted start to 2025, their Spanish counterparts have been on a stellar run – helping to boost the country’s share market up 15% YTD.
Global X ETFs Senior Product and Investment Strategist, Marc Jocum says Spain is standing out as a top performing market in Europe.
“Running with the bulls, maybe not. But Spanish stocks are certainly on a bull run,” Jocum said.
“While Europe’s economic activity is forecasted to expand by 0.9% in 2025, Spain is expected to grow at more than twice that rate. Unemployment in Spain has dropped significantly from its Euro-debt crisis peak of 26% in 2013 and is now nearing single digits. Meanwhile, borrowing costs are easing as the European Central Bank (ECB) maintains its rate-cutting approach, slashing rates overnight by 0.25% to 2.5% and markets are predicting two more rate cuts on the cards by year-end.
“The Eurozone more broadly is performing incredibly well in comparison to other developed markets such as the US and Australia. In fact, it is up 12% so far this year in comparison to the US and Australia which have been flat.”
Jocum says Spanish bank stocks such as Banco Santander, BBVA, Banco Sabadell and CaixaBank are largely responsible for the gains.
“Spanish banks have reported strong financial results, bolstered their capital positions, and increased both share buybacks and dividends to shareholders, all while trading at extremely cheap valuations,” Jocum said.
“Spanish bank stocks are up more than 40% this year, contrasted by Australian banks which have been very flat. So, given Australian banks are relatively stagnant, trading at expensive multiples, and are among the most commonly held stocks by direct investors and super funds alike, it could be an apt time to look at international markets such as the Eurozone for growth opportunities.”
Some of these stocks feature in the Global X EURO STOXX 50 ETF (ASX: ESTX), which has been the best performing European ETF over the past five years and is amongst one of the lowest cost exposures for Australians to get access to European shares.
The Global X EURO STOXX 50 ETF is one of the 42 ETFs Global X offers in Australia across a lineup spanning core, thematics, income, commodities, digital assets and more.
