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Gaining Access to the European Equity Market

Release date: 13 Mar 2017 | Eurex Exchange

Gaining Access to the European Equity Market

Paper by Dr. Jan-Carl Plagge, Director, Head of Applied Research, STOXX Ltd

With Europe’s economy starting to stabilize, and the expectation of continued growth, the attractiveness of European markets has significantly increased in recent years. Investors may want to look to pan-European indices to allocate capital. This paper introduces the STOXX Europe 600 index as a broad, yet tradable representation of the European equity market. The comprehensive coverage of the index provides investors with a country and industry allocation that is very similar to that of the underlying total market. By extending its reach beyond mere large-cap stocks, the STOXX Europe 600 profits from the relative outperformance of mid- and small-caps - an observation that was characteristic of the developed European equity market for most of the last decade. Further, and especially relevant in the current low interest rate environment, Developed European equity markets as represented by the STOXX Europe 600 offer dividend yields far in excess of the aggregate of other developed markets.