Why Anthony Esposito favours Spanish stocks over all other equity markets

The IBEX 35 has emerged as a top-performing equity market in 2025, gaining nearly 30% year-to-date and surpassing major European and US benchmarks. Anthony Esposito of AscalonVI highlights Spanish stocks as a compelling investment despite global market caution, attributing their appeal to a projected 2.6% economic growth, attractive P/E ratios around 12, and strong sectoral performance in financials, utilities, and renewables, positioning Spain as a rare developed market offering both growth and value.

Analysis

The Spanish equity market, as measured by the IBEX 35 index, has demonstrated significant strength in 2025, delivering a year-to-date return of nearly 30% that outpaces both European and US benchmarks. This performance is underpinned by a robust domestic economy projected to grow 2.6%, favorable corporate earnings, and a compelling valuation proposition. According to Anthony Esposito of AscalonVI, Spain's trailing price-to-earnings ratio of approximately 12 offers a notable discount compared to the P/E ratios near 20 for Germany and France. The market's resilience is further enhanced by the IBEX 35's composition, which is dominated by services exporters and domestic-focused companies, providing a degree of insulation from global trade volatility. Key sectors driving this momentum include financials like BBVA and Santander, which are benefiting from rising interest margins, alongside utilities and renewables such as Iberdrola and Ferrovial, which are buoyed by strong capital inflows and supportive policy. This view is reinforced by institutional interest, evidenced by UBS ranking Spain second among six major European indexes in its recent R.E.V.S. report, highlighting broad-based strength across multiple firms.

Key Decisions for Investors

• Investors should consider overweighting Spanish equities relative to other developed markets, given the country's superior economic growth, attractive valuation discount, and demonstrated market outperformance.
• Focus capital allocation on Spain's leading sectors such as financials, utilities, and renewables, as firms like BBVA, Santander, and Iberdrola are well-positioned to capitalize on rising interest rates and policy-driven capital flows.
• While fundamentals are strong, monitor the sustainability of the 30% year-to-date rally by tracking corporate earnings growth and macroeconomic indicators to ensure valuations remain justified.