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The IA Europe ex UK sector delivered average growth of 23.06% over the past 12 months, which was the 3rd highest out of 55 IA investment association sectors.
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Out of 138 European equity funds analysed, only 35 achieved top 4- or 5-star ratings over the 1, 3, and 5-year periods.
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58.7% of European equity funds have a history of underperformance, with 45 receiving a low 1-star rating and 36 rated just 2 stars.
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The Artemis SmartGARP European Equity I Acc fund has consistently been the top-performing fund within the IA Europe ex UK sector across the periods analysed, delivering the highest returns and ranking first over multiple timeframes.
European equity funds continue to play an important role for UK investors looking to invest beyond domestic markets. The Investment Association’s IA Europe ex UK sector now holds around £59.2bn in assets, reflecting ongoing interest in the region.
After a prolonged period in which US equities dominated global growth, European markets regained momentum through 2025. Improving confidence, easing inflation pressures and changes in monetary policy supported stronger returns across parts of the eurozone. Over the past 12 months, the IA Europe ex UK sector delivered average growth of 23.06%, making it the third highest performing sector out of 55 IA sectors.
That improvement has not been evenly shared. Performance across European equity funds has varied, with currency movements, political developments and global trade conditions contributing to differing outcomes. This has widened the gap between higher and lower ranking funds and increased the importance of fund selection.
To provide clarity, we analysed the performance of 138 European equity funds over the 1, 3 and 5 year periods. This article highlights 10 funds that ranked consistently above their sector average based on past performance.
European Equity Funds Performance Summary
We analysed 138 European equity funds, reviewing their growth and sector rankings over the past 1, 3 and 5 years. Each fund was assigned a performance rating based on how it compared with others in the IA Europe ex UK sector.
The results show that 35 European equity funds achieved a 4 or 5 star rating, indicating a consistent record of delivering returns above the sector average across the periods analysed.
In contrast, 81 funds, representing more than 58% of those reviewed, received a 1 or 2 star rating. These funds have produced below average returns over time when compared with the wider sector.
This spread of results highlights the variation in performance across European equity funds and reinforces the importance of careful fund selection rather than relying on the sector as a whole.
10 Best Performing European Equity Funds
From the full analysis, 35 European equity funds achieved a 4 or 5 star Yodelar Rating. From this group, the table below highlights 10 European equity funds within the IA Europe ex UK sector that ranked consistently above their sector average across the 1, 3 and 5 year periods analysed.
Each of these funds has been awarded a top 4 or 5-star rating based on its performance relative to sector peers.
1. Artemis SmartGARP European Equity Fund
The Artemis SmartGARP European Equity fund invests in European companies outside the UK, targeting long term capital growth over a period of five years or more. The fund follows a quantitative screening process designed to identify companies that appear undervalued relative to their fundamentals, using measures such as earnings trends and changes in analyst expectations. Investment decisions are driven by this systematic approach rather than discretionary stock selection.
The fund has delivered very strong historical growth, ranking at the top of the IA Europe ex UK sector across the periods analysed. Over the past 12 months, it returned 57.14%, ranking 1st out of 138 funds in the sector, compared with a sector average return of 23.06%.
Over three years, the fund delivered growth of 109.46%, again ranking 1st, versus a sector average of 44.49%. Five year returns of 154.74% also placed the fund 1st in the sector, well ahead of the 54.55% sector average.
2. WS Ardtur Continental European Fund
The WS Ardtur Continental European fund is an actively managed strategy investing in listed companies across continental Europe, with the objective of achieving long term capital growth. The fund currently manages around £400 million in assets.
Over the past 12 months, the fund delivered growth of 45.42%, ranking 5th out of 138 funds in the IA Europe ex UK sector. Over three years, returns of 67.83% were ahead of the sector average of 44.49%. Over five years, the fund returned 138.82%, ranking 2nd out of 126 funds in the sector and significantly above the sector average of 54.55%.
3. UBS MSCI EMU Value UCITS ETF
Launched in 2022, the UBS MSCI EMU Value UCITS ETF is a passively managed exchange traded fund that tracks the MSCI EMU Value Index. The index focuses on value oriented shares from European Union countries, selected using measures such as low price to book ratios. The ETF uses full replication, holding all constituents of the underlying index.
Over the periods analysed, the ETF has ranked towards the top of the IA Europe ex UK sector. Over one year, it delivered growth of 44.32%, ranking 6th out of 138 funds. Over three years, returns of 74.25% ranked 3rd and were above the sector average of 44.49%. Over five years, growth of 96.22% ranked 4th, again well ahead of the sector average of 54.55%.
4. Amundi MSCI EMU Value Factor
Like the UBS MSCI EMU Value UCITS ETF, the Amundi MSCI EMU Value Factor is a passively managed exchange traded fund that tracks the MSCI EMU Value Index. As a result, performance outcomes across both funds are closely aligned.
Over one year, the fund delivered growth of 43.85%, ranking 7th out of 138 funds in the IA Europe ex UK sector and above the sector average of 23.06%. Over three years, returns of 73.51% ranked 4th, again ahead of the 44.49% sector average. Over five years, the fund returned 94.65%, ranking 7th within the sector.
Despite tracking the same index, performance has been marginally lower than the UBS MSCI EMU Value UCITS ETF. This difference is largely explained by cost, with the Amundi fund carrying an ongoing charge of 0.40% compared with 0.26% for the UBS ETF.
5. Quilter Investors Europe (ex UK) Equity Income Fund
The Quilter Investors Europe ex UK Equity Income Fund follows an income focused approach, investing in European companies that pay regular dividends while also targeting long term capital growth. At least 80% of the portfolio is invested in companies based in continental Europe, excluding the UK.
Over the periods analysed, the fund has ranked towards the higher end of the IA Europe ex UK sector. Over one year, it delivered growth of 36.98%, ranking 12th out of 138 funds. Over three years, returns of 55.45% placed the fund within the top half of the sector. Over five years, growth of 88.64% ranked 9th out of 126 funds, above the sector average of 54.55%.
6. Schroder European Recovery Z Acc
The Schroder European Recovery Z Acc fund is an actively managed strategy investing in European companies outside the UK, with the objective of delivering long term capital growth over a three to five year period. At least 80% of the portfolio is invested in European equities. The fund follows a value based approach, focusing on companies that appear undervalued relative to their longer term earnings profile.
The fund manages approximately £450.42 million in assets and has delivered growth above the IA Europe ex UK sector average across the periods analysed. Over one year, it returned 35.74%, compared with a sector average of 23.06%. Over three years, growth of 50.29% was also ahead of the sector average of 44.49%. Over five years, the fund returned 87.02%, ranking 10th out of 126 funds and above the sector average of 55.54%.
7. EdenTree European Equity B Dis GBP
The EdenTree European Equity B fund is designed to achieve both capital growth and income by investing in a diversified range of companies across continental Europe (ex UK) over 5 years. At least 70% of holdings are invested in companies that demonstrate positive environmental and social practices, in line with EdenTree’s Sustainability Approach. This strategy excludes activities and sectors that do not meet the fund’s sustainability criteria.
Its performance has been competitive over multiple periods. Over one year, it achieved growth of 34.08%, exceeding the sector average of 23.06%. Its three-year return of 56.24% also surpassed the sector average of 44.49%, while over five years the fund generated a return of 82.64%, ranking 14th out of 126 funds and outperforming the sector average of 54.55%.
Performance has benefited from exposure to large European companies with strong sustainability credentials. Holdings such as Merck KGaA, Orange SA, Indus Holding, and Enel have contributed to the fund’s long-term returns. By integrating financial analysis with ESG considerations, the fund has ranked among the top performers within the IA Europe ex UK sector.
8. JPM Europe Dynamic ex UK C Acc
The JPM Europe Dynamic Ex UK C Acc fund targets long-term capital growth by investing 80% in European equities outside the UK.
Managing around £776 million in assets, the fund has delivered strong returns across all measured periods. Over one year, it achieved 33.27% growth, exceeding the sector average of 23.06%. Its three-year return of 55.63% also surpassed the sector average of 44.49%, while over five years the fund generated a return of 81.09%, ranking 20th out of 126 funds and outperforming the sector average of 54.55%.
9. Janus Henderson European Focus I Acc
The Janus Henderson European Focus I Acc fund aims to provide long-term capital growth and income, typically over five years or more. It is actively managed and invests at least 80% of its assets in a focused portfolio of European companies, excluding the UK. The fund has the flexibility to invest across different sectors and company sizes without strict constraints.
This strategy has yielded competitive returns across periods within the IA Europe ex UK sector. Over one year, the fund achieved growth of 32.98%, ranking 17th out of 138 sector peers. Its three-year return of 65.10% was well above the sector average of 44.49%, while over five years it returned 82.73%, ranking 13th out of 126 funds and outperforming the sector average of 54.55%.
10. UBS Euro Stoxx 50 ESG UCITS ETF
The UBS Euro Stoxx 50 ESG UCITS ETF aims to replicate the price and return performance of the EURO STOXX 50 ESG Index. As a passively managed fund, the index applies ESG screening, removing companies that do not meet set environmental, social, and governance standards. This includes businesses involved in controversial weapons, tobacco, fossil fuel production, or breaches of the UN Global Compact.
The fund has delivered very strong returns across all analysed timeframes. Over one year, it returned 31.87%, ranking 17th out of 138 funds in the sector. Performance over longer periods has been particularly impressive, with a three-year return of 74.30%, placing it 2nd out of 133, and a five-year gain of 98.88%, ranking 3rd out of 126 and well ahead of the sector average of 54.55%. These results underscore the fund’s consistent outperformance and place it among the best-performing European equity funds.
Conclusion
European equities continue to present scope for growth and diversification, particularly as confidence improved through 2025 and appears to be carrying into 2026. The IA Europe ex UK sector was the third highest performing IA sector out of 55 over the past 12 months, supported by improving sentiment and stronger returns across parts of the eurozone. European equity funds also provide access to a wide range of established businesses across areas such as consumer goods, financials and industrials.
That said, performance across the IA Europe ex UK sector remains uneven. From the 138 European equity funds analysed, only 35 achieved a 4 or 5 star Yodelar rating, reflecting sustained performance across the periods analysed. In contrast, more than 58% of funds have shown a pattern of underperformance over time.
This gap reinforces the importance of fund selection. Assessing European equity funds requires more than focusing on recognisable fund names or short term returns. Greater insight comes from understanding how funds are structured, how consistently they have delivered results, and how they fit within a wider portfolio rather than viewing performance in isolation.
Reviewing the Effectiveness of Your Current Portfolio
While this analysis of the IA Europe ex UK sector highlights funds that have delivered strong historical growth and those that have underperformed, it does not show how funds interact within a wider portfolio. Many higher-ranking European equity funds share exposure to similar regions, sectors and investment styles, meaning performance across individual funds can often move in step.
Where portfolios hold multiple Europe ex UK funds with overlapping exposures, this can result in duplication rather than diversification. In these cases, periods of weakness affecting particular regions, sectors or styles within Europe can impact several funds at the same time, increasing sensitivity to the same risks.
This underlines the importance of diversification even within a single regional sector. Holding more than one fund in the IA Europe ex UK sector does not automatically reduce risk if those funds are constructed in a similar way or target the same areas of the market.
This is where a portfolio analysis becomes valuable. Yodelar’s free portfolio analysis looks beyond individual fund performance to assess how holdings work together, highlighting areas of overlap, underperformance and concentration risk. While past performance helps identify how funds have behaved historically, understanding how each European equity fund fits within the overall portfolio is key to building a more balanced and resilient investment strategy.
