Buy This, Not That: Spain Offers Better Yields Than Italy in ETF Battle

Shah Gilani|June 18, 2025

While U.S. markets have dominated for decades, European bourses are suddenly stealing the spotlight…

But not all European markets are created equal.

Some offer stronger dividend yields, better financial sector exposure, and more resilient performance during recent volatility.

I’ve analyzed which European ETF deserves your investment dollars – and which one should stay on the shelf.

The answer might surprise you, especially when you see the heavyweight champion hiding inside one of these funds.

Click on the thumbnail below to watch the video.

Transcript

Hey, everybody.

Shah Gilani here with your weekly BTNT, as in Buy This, Not That.

I got a lot of questions about U.S. exceptionalism.

Is it dead?

The answer in my book is: no way.

But this question has come up because so far this year, including post-April 8th sell-down and the subsequent bounce back, European stocks, emerging market stocks, and other world markets have performed better than U.S. markets – the first time that’s happened in a long, long time.

So, the question about American exceptionalism, about technology leading the world, about American markets leading everybody else for so many decades – is that over and done?

My answer is no.

But when you see other benchmarks, other world benchmarks, other national benchmarks – whether it’s Spain, Italy, Poland, Austria, China, Japan, Australia (all of them now covered by ETFs) – do better than the U.S., then it makes you wonder.

Here’s just a snapshot, because I’ve gotten a bunch of comments and questions from you all about Europe.

You want to zone in on Europe, and with good reason.

As far as year-to-date performance goes, the European bourses have done better than the U.S. Since April 8th, from the lows when globally everything took a hammer and got hit like a nail, the S&P has rebounded 20%.

MSCI Europe is up 23.2%.

Year-to-date, Europe is up more, though the U.S. is catching up quickly.

The question then is: is this something that’s going to continue? Will we see outperformance by European benchmarks?

I’ve looked at the European benchmarks and the top performers, and I’m going to bring this down to today’s BTNT between Spain and Italy.

As a measure of Spain and the Spanish bourse, I’m going to use – let’s go to the videotape so you can actually see this – the iShares MSCI Spain ETF. The symbol is EWP.

And we’re going to compare the iShares Spain EWP to iShares Italy. The iShares Italy MSCI ETF symbol is EWI.

So we’re comparing EWP to EWI.

Now as far as Spain goes, EWP has shown really good performance.

We’ve been going sideways in the $33 range, had a really nice move up, and then, of course, we had the tariff news – just an absolute tear-up – and then a really nice bounce. EWP made new highs.

Then we saw a quick rollover. Today, and it’s Wednesday morning as I’m recording this for you, the markets have been open about 15-20 minutes now, and EWP is up a little bit. Again, there’s a bit of a rollover here, but I like EWP for a lot of reasons.

Number one, it has a 3.07% dividend yield. I like that.

Looking at the holdings, I’m going to focus on their biggest holding: more than 17.5% of the portfolio is Banco Santander, and I love Banco Santander.

It’s a great holding, and having such a big chunk of this ETF in Santander is a good enough reason for me to want to own the Spain iShares ETF, EWP, over EWI.

Now EWI shows a very similar picture.

If you look at EWI, you’ll see they have pretty much the same pattern, moving horizontally and then suddenly having a nice move up. Here’s the horizontal, whole lot of nothing here. Nice move up just like EWP did.

It sold off, just like EWP did, but EWI sold off more and dropped below its average.

Then it had a nice bounce up, made a new high, but it’s also rolled over a lot harder than EWP has. As far as Italy goes, their top holdings include a couple of banks.

UniCredit is at 13.31%. I’m not a big fan of the banks that lead the EWI ETF.

Meanwhile, I am a much bigger fan, a real fan of Banco Santander, which again is 17.5% of EWP. So, when it comes down to Europe, when it comes down to picking between Spain or Italy, I like the Spanish market better. I like the Spanish ETF, EWP, better than EWI.

With EWP, you get a slightly better yield. With EWP, you get a 17.5% holding of Banco Santander, which, by the way, is a little sidebar, side pocket idea for you. Take a look at Banco Santander. I think it’s a stock you want to own.

But as far as BTNT, I say buy EWP, not EWI.

Catch you guys next week. Cheers.