There are five main ways to buy European shares on the ASX. VEQ and IEU give you the whole of developed Europe, ESTX gives you 50 eurozone giants, HEUR removes the currency, and F100 is the UK alone. VEQ and ESTX are the cheapest at 0.35% a year. If you own VGS, roughly a tenth or more of it is already European.
Why investors are adding Europe
For most of the past decade, global share returns have been driven by a handful of US technology giants. That has worked well, but it also means a typical global ETF is now dominated by one country and one sector. Investors who want to spread that risk have started looking at Europe.
The money is following. IEU, the iShares Europe ETF, took in $185 million of new money in September 2026 alone, the eighth-largest inflow of any ETF on the ASX that month. The other Europe funds saw only small inflows.
The case for Europe is not that it will beat the US. Nobody knows that. It is that Europe owns a different kind of business: more banks, more industrial companies, more healthcare, and far less technology. European shares have also generally traded on lower price-to-earnings multiples than US shares, which some investors see as a margin of safety.
The five ways in, side by side
| IEU | VEQ | ESTX | HEUR | F100 | |
|---|---|---|---|---|---|
| Issuer | iShares | Vanguard | Global X | Betashares | Betashares |
| What it holds | Large European companies | Developed Europe, large and mid | Euro Stoxx 50 | Europe ex UK, hedged | FTSE 100 (UK) |
| Fee (MER) | 0.58% | 0.35% | 0.35% | 0.56% | 0.45% |
| Fund size | $1,327m | $632m | $490m | $88m | $429m |
| 1-year return | +8.3% | +7.7% | +7.6% | +17.2% | +10.3% |
| 3-year return (a year) | +14.2% | +14.4% | +16.7% | +16.5% | +14.6% |
| 5-year return (a year) | +9.3% | +8.5% | +10.6% | +8.8% | +11.2% |
| Currency hedged? | No | No | No | Yes | No |
Total returns including distributions to 30 September 2026. 3 and 5-year figures are per year. Source: TMX Australia monthly funds report.
Fees and 5-year returns
There is also IVE, which tracks the MSCI EAFE index of developed markets outside North America. About half of it is Europe and about a fifth is Japan, so it is a broader "rest of the developed world" fund rather than a pure Europe play.
What each one actually owns
The labels sound similar, but the country mix is very different. This is the single most important thing to check before you buy.
- IEU and VEQ cover all of developed Europe. The UK is the largest country in both, followed by Switzerland, France and Germany. They are 76% the same fund.
- ESTX holds only the 50 biggest companies in the eurozone. That means no UK and no Swiss companies, so no Nestle, Roche, Shell or HSBC. France and Germany make up more than 60% of it.
- HEUR also leaves out the UK and Switzerland, holds about 118 companies and is currency hedged.
- F100 is the UK market: oil, banks, pharmaceuticals and consumer staples such as Shell, HSBC, AstraZeneca and Unilever.
Where each Europe ETF invests
The concentration also differs. ASML, the Dutch maker of chip-making machines, is about 4.5% of IEU but nearly 10% of ESTX and more than 10% of HEUR. With only 50 stocks, ESTX's top ten carry far more weight than in VEQ or IEU.
How Europe differs from the US
If your global shares are mostly US, adding Europe changes your sector mix more than anything else. Financials are about a quarter of IEU, double their weight in IVV. Industrials and healthcare are also much larger. Technology, which is more than a third of the S&P 500, is under a tenth of IEU.
Europe is heavier in banks, industrials and healthcare
That is both the appeal and the risk. When technology leads, Europe tends to lag, and it has: over five years VGS returned 74.6% and IVV 87.8%, against 56.3% for IEU and 50.2% for VEQ. When banks, energy or industrial companies have a good run, Europe can hold up better. European governments lifting defence spending has helped industrial and aerospace names, though the global defence ETFs such as ARMR fell 11.8% over the past year, a reminder that a popular story is not the same as a good return.
What $10,000 grew to over five years
How much Europe do you already own?
Before adding a Europe ETF, check what is in your global fund. In VGS's largest 400 holdings, which make up about 83% of the fund, European companies add up to about 10%, led by the UK, Switzerland, Germany and France. The true figure is a little higher once the smaller holdings are counted. IVV, by contrast, holds no European companies at all.
How much of each Europe ETF you already own in VGS
Low overlap means a Europe ETF genuinely adds something new to a VGS holder's portfolio. It also means VGS already gives you a modest slice of Europe for 0.18% a year, so a dedicated fund is a deliberate tilt, not a requirement. IEU and VEQ, on the other hand, are 76% the same, so holding both adds very little. Check your own overlap in our calculator →
Hedged or unhedged?
An unhedged Europe ETF gives you European shares plus the movement of the euro, pound and Swiss franc against the Australian dollar. A hedged fund removes most of that currency effect.
The cleanest example is the UK pair from Betashares. F100 (unhedged) returned 10.3% over the past year, while H100 (hedged) returned 16.9% on the same 100 companies. The difference was almost entirely currency. HEUR's 17.2% over the year was helped in the same way. In other periods the currency has worked the other way, as we explain in hedged vs unhedged ETFs.
Fees: the gap adds up
What fees cost on $100,000 over 20 years
IEU is the most popular Europe ETF but also the most expensive. VEQ covers a very similar market for 0.23% a year less, which on $100,000 is about $230 a year before compounding. IEU's larger size and tight trading spreads are its main advantages.
How to choose
- Broad Europe at the lowest fee: VEQ suits investors who want the whole region, including the UK and Switzerland, cheaply.
- Broad Europe with the biggest fund: IEU suits investors who value size and liquidity and accept a higher fee.
- Eurozone blue chips: ESTX suits those who want a concentrated group of 50 leaders and are comfortable with no UK exposure.
- No currency risk: HEUR suits investors who want European shares without the euro, though it is small at $88 million.
- Size it as a satellite. For most investors Europe works as a 5 to 15% tilt alongside a global core, not a replacement for it. See how to build a satellite portfolio.
Compare them directly: IEU vs VEQ, VGS vs IEU and VGS vs ESTX, or browse every Europe ETF and every international shares ETF.
Compare all four Europe ETFs side by side →
Common questions
What is the best Europe ETF in Australia?
It depends on what you want. VEQ and ESTX are the cheapest at 0.35% a year. IEU is the largest at $1.3 billion. ESTX has the best 3-year return of the broad funds at 16.7% a year to 30 September 2026, but it holds only 50 eurozone companies.
Is IEU or VEQ better?
They are 76% the same. VEQ charges 0.35% a year against IEU's 0.58%. IEU has returned slightly more over five years (9.3% a year vs 8.5%), and it is the larger fund.
Does VGS already include Europe?
Yes. European companies make up roughly 10% or more of VGS, mainly UK, Swiss, German and French companies. A separate Europe ETF increases that weight.
Does ESTX include UK companies?
No. ESTX tracks the Euro Stoxx 50, which covers only countries that use the euro. For UK exposure, consider IEU, VEQ or F100.
Joshua Stega is a financial adviser with 20 years' experience and the founder of ETF Adviser. He built ReviewETF to make every Australian ETF easy to find and compare.
General information only. It does not take into account your objectives, financial situation or needs. Consider the PDS and TMD before investing. Past performance is not a reliable indicator of future performance. Data as at 30 September 2026.