Contrasting the two popular benchmarks for Eurozone equities – the MSCI EMU and the EURO STOXX 50 – we can see they differ with respect to performance. Since January 1999, the MSCI EMU has outperformed the EURO STOXX 50 by 80 bps per annum.
Elsewhere, we explored how the different indices cover the market. As a broad market index, the MSCI EMU maintains a coverage of 85% of the total market capitalization, while the market coverage of the EURO STOXX 50 is only 54% of MSCI EMU.
But how do broad market indices fare against blue chips within individual European countries?
We evaluated return differentials across five major European markets. In most cases the broad market MSCI indices outperformed regional blue-chips.
Comparing the MSCI Switzerland to the SMI we see the largest country level return differential of 20 bps per annum from January 1999 to March 2017. The MSCI Spain also outperformed Ibex in that same period by 18 bps per annum. In Germany and the UK, the outperformance was less pronounced, and in France the CAC 40 outperformed the MSCI France by a small differential.
At the Eurozone level, the MSCI EMU has outperformed the blue-chip EURO STOXX 50 since 1999. This outperformance by the broad market MSCI indices is not the case in all countries, but they do fare well compared to blue chips for most markets.
Investors should be aware that past performance is not an indicator of future results.
Views and opinions expressed are presented for informational purposes only and are a reflection of UBS Asset Management’s best judgment at the time a report or other content was compiled. UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. The information and opinions contained in the content of this webpage have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith but no responsibility is accepted for any errors or omissions. All such information and opinions are subject to change without notice but any obligation to update or alter forward-looking statement as a result of new information, future events, or otherwise is disclaimed. Source for all data/charts, if not stated otherwise: UBS Asset Management.
Any market or investment views expressed are not intended to be investment research. Materials have not been prepared to address requirements designed to promote the independence of investment research and are not subject to any prohibition on dealing ahead of the dissemination of investment research. The information contained in this webpage does not constitute a distribution, nor should it be considered a recommendation to purchase or sell any particular security or fund. The materials and content provided will not constitute investment advice and should not be relied upon as the basis for investment decisions. As individual situations may differ, clients should seek independent professional tax, legal, accounting or other specialist advisors as to the legal and tax implication of investing. Plan fiduciaries should determine whether an investment program is prudent in light of a plan's own circumstances and overall portfolio. A number of the comments in the content of this webpage are considered forward-looking statements. Actual future results, however, may vary materially. Past performance is no guarantee of future results. Potential for profit is accompanied by possibility of loss.
© UBS 2019 The key symbol and UBS are among the registered and unregistered trademarks of UBS.