Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Get to know Europe’s top stocks
Søren Otto Simonsen
Senior Investment Editor
Summary: While the European stock market is as intertwined in the global economy as any, it provides investment opportunities that can be difficult to find elsewhere. And while the US indices become increasingly tech-heavy, Europe offers a more diversified investment landscape. To highlight some of the European possibilities, we have outlined the best performing stocks over a 5-year period of the massive Euro STOXX 600 index with a market cap of +5 billion euro on the first date of measurement.
The European stock market at a glance
With a bit of good grace, you could wedge in the argument that the European stock market is the oldest exchange we have. At least it is pretty widely considered that the Amsterdam Stock Exchange, with roots back to the 1600s, is the oldest modern stock trading venue.
Whether the European stock exchange's status as the old geezer has anything to do with it, the Euro STOXX 600 index offers a pretty well-diversified group of companies covering all of the 11 so-called GICS sectors. At the time of writing, Financials make up the biggest proportion of the index, covering a bit more than 18%. Industrials, Health Care, Consumer Staples, and Consumer Discretionary round out the top five, while Real Estate is the smallest with 1.3%.
This diversification is worth noting, especially in light of increasing concentration risk in the major US indices, which Peter Garnry, our Head of Equity Strategy, has written about on multiple occasions. Here it is tech stocks that make up an increasingly large proportion of the indices, meaning that the risks that tech stock faces are also prevalent when investing in the indices.
The Euro STOXX 600 index has enjoyed the same positive performance as most indices across the globe have. As such, it has climbed around 40% from December 2018 to December 2023. Comparatively, indices like e.g. the S&P 500 and the Nasdaq has had higher returns over the five-year period, but that is in large part due to the growing tech concentration mentioned above, which also comes with specific risks.
You can gain exposure to the index through products such as the iShares STOXX Europe 600 UCITS ETF, the Lyxor Core STOXX 600 ETF and the BNP Paribas Easy Stoxx Europe 600 UCITS ETF.
5-year performance: Europe’s largest companies are formed
Since 2019, the 20 best performing stocks have all returned more than 180%, with Novo Nordisk as the best performing with 433%. This has also meant that Novo Nordisk has become Europe’s most valuable company in terms of market cap. The second most valuable company, interestingly, is the 20th best performing, LVMH. ASML, which has the second best performance, has squeezed itself in as the fourth most valuable company in the region, just behind Nestlé, which, with a 5-year performance of 70%, doesn’t make the cut for this list.
The 20 top performers come from 10 different countries. Four of those are represented with three companies, one of which, we are proud to tell you, is Denmark (where Saxo is also headquartered). The others are the UK, France, and Switzerland. Italy and the Netherlands are represented with two companies, while Germany, Sweden, Ireland, and Belgium all have one on the list.
Sources: Saxo, Bloomberg and ChatGPT
Performance is calculated based on the following:
STOXX 600 index: price on the last day of the month from December 2018 - December 2023
STOXX 600 individual stock performance: Price on January 1, 2019 - price on January 9, 2024.
ETFs mentioned here are chosen based on Morningstar rating and last three month's popularity in SaxoTraderGo with Key Information Documents.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer