Top ETF Areas of Q1 of 2025

Wall Street experienced massive volatility in the first quarter of 2025, thanks to trade uncertainty under the new Trump administration. This development has sparked concerns about rising inflation, a slowing U.S. economy, and a less dovish Fed.

Meanwhile, the artificial intelligence (AI) sector has seen the emergence of low-investment innovations from Chinese tech companies like DeepSeek and Alibaba, putting pressure on Wall Street’s Magnificent Seven stocks.

Overall, the S&P 500 has lost 2.9% so far this year (as of March 26, 2025), the Dow Jones is off 0.21% and the Nasdaq has slumped 7.3%. Meanwhile, international markets gained momentum. All-world exchange-traded fund iShares MSCI ACWI ETF ACWI has added 1% so far this year (as of March 26, 2025).

Against this backdrop, below we highlight a few winning exchange-traded fund (ETF) areas of the first quarter of 2025.

Poland

iShares MSCI Poland ETF (EPOL) – Up 39.5%

After years of lagging, international stocks have outperformed U.S. markets. Inflation concerns and new tariffs have shifted investor interest abroad, driven by solid European fundamentals. With historically wide valuation gaps, international stocks appear attractive (read: Europe ETFs Beating S&P 500 in 2025: Here's How).

Gold & Silver Miners

Sprott Gold Miners ETF (SGDM) – Up 34.1%

VanEck Gold Miners ETF (GDX) – Up 32.8%

iShares MSCI Global Silver Miners ETF (SLVP) – Up 30.3%

The gold and silver mining sector of the broader stock market has gained strength in Q1, given the surge in metal prices. Ongoing trade tariff disputes and fears of an economic slowdown have increased demand for gold and silver as safe-haven investments (read: Are Silver ETFs Better Plays Than Gold Now?).

Additionally, the U.S. dollar has remained subdued this year. Since metals are priced in the greenback, a weaker dollar has supported higher metal prices. Investors should note that mining stocks often act as leveraged plays on the underlying metals. This is why gold and silver mining ETFs surged in Q1.

Copper

United States Copper Index Fund (CPER) – Up 29.9%

The underlying SummerHaven Copper Index Total Return reflects the performance of the investment returns from a portfolio of copper futures contracts on the COMEX exchange.

Copper metal miners have surged lately, given the surge in the metal’s price. Expectations of increased demand, stimulus measures in China and supply-chain disruptions have driven the copper price higher.

Defense

Global X Defense Tech ETF (SHLD) – Up 28.0%

The underlying Global X Defense Tech Index seeks to provide exposure to defense technology companies that are positioned to benefit from technology, services, systems and hardware that cater to the defense and military sector.

Increased defense spending by EU economies has also boosted the fund’s prospects. The European Commission has proposed to allocate about $841 billion in defense expenditure over the next four years. Additionally, Israel's recent airstrike on Gaza, following a failed ceasefire agreement, has raised concerns about escalating Middle East tensions.

Europe Financials      

iShares MSCI Europe Financials ETF (EUFN) – Up 26.4%

Europe’s decent economic growth momentum has boosted the zone’s financial stocks and ETFs.The ECB lowered the three key interest rates by 25 basis points, as expected, in its latest meeting. This along with increased risk-on environment has steepened the yield curve and benefitted the financial stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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