Do you know what Eurostoxx 50 is? This is one of the most important terms to know about company-related market capitalization.
On this occasion, we want you to fully understand what Eurostoxx 50 is and why it is important to know what this term refers to.
What is Eurostoxx 50
The first thing you should know about the Eurostoxx 50 is what we are referring to. It is a European stock index. And in it you can find a list of the 50 most important companies by market capitalization.
Within these companies, we can find 19 different sectors and within them, there are 8 European countries (keep in mind that this index is from Europe).
Which companies make up Eurostoxx 50
Below we give you the list of countries that make up the Eurostoxx 50 as well as the companies that are within that top 50. Keep in mind that the information we have obtained is from 2022:
- Spain: BBVA, Iberdrola, Inditex, Santander.
- France: Air Liquide, Airbus, AXA, BNP Paribas, Danone, Essilor Luxottica, Hérmes International, Kering, L'Oréal, LVMH, Pernod Ricard, Safran, Sanofi, Schneider Electric, TotalEnergies and Vinci.
- Germany: Adidas, Allianz, BASF, Bayer, BMW, Daimler, Deutsche Börse, Deutsche Post, Deutsche Telekom, Infineon Technologies, Linde, Münchner Rück, SAP, Siemens, Volkswagewn and Vonovia.
- Belgium: Anheuser-Busch InBev.
- Ireland: CRH and Flutter Entertainment.
- Italy: Enel, ENI, Intesa Sanpaolo and Stellantis
- Holland (The Netherlands): Adyen, Ahold Delhaize, ASML, ING Groep, Philips and Prosus.
- Finland: Kone.
In general, there is no doubt that, by number, the banking sector is the one with the most companies within this index. However, by capitalization, it is the cyclical consumer companies that add up a greater amount of euros.
Key features
Now that you have a better idea about what the Eurostoxx 50 is, we want to show you all the characteristics that you can find in this benchmark index.
Not all companies are the same
Rather, not all have the same weight. For example, the first and most important will not have the same weight as one that has entered the top 50 and that is the last.
Each one, due to its purchasing power, capitalization, etc. they have a different weight in the Eurostoxx 50. In other words, depending on the price per share multiplied by the number of shares that are active and in circulation, the weight of a company will be greater or less than others.
Being practical, you should know that of all the companies and countries that make up the Eurostoxx 50, only France, Germany, Spain, Italy, Belgium, Finland and the Netherlands have the most weight in this index.
There is a maximum weight in the index
Based on the above, you may be considering that there may be companies that have a large capitalization, and others that do not. And you are not wrong. But this stock index also predicted it.
And that is why the maximum weight that a company can have is 10%. Even if the result of the capitalization is higher, there is a limit and it cannot be exceeded.
It is reviewed several times a year
In fact, revisions to the Eurostoxx 50 occur between two and four times a year.
Twice if it is done semi-annually.
Four if quarterly.
The objective is to verify and control the composition of that top 50 so that it is always as up-to-date as possible.
However, there are other times when it is only reviewed once a year. In this case, what they take into account is not only the capitalization of the companies, but also other values such as business volume.
When was the Eurostoxx 50 created?
The Eurostoxx 50 is relatively young. It was created by Stoxx Limited, a joint venture of Deutsche Börse, Dow Jones & Company and SWX Swiss Exchange.
The year he was born was 1998.
What is the Euro Stoxx 50 for?
The Eurostoxx 50 has several functions and reasons why it was created.
One of the first is to serve as a replica model. And it is used to create derivative products (that is, assets that have a value that depends on another asset). Examples of these derivative products can be Futures, Warrants, ETFs, Options...
Another of the functions of the Eurostoxx 50 is to serve as a reference asset for those who work with investment funds. Depending on how the evolution goes, many of the investment fund assets (funds, insurance, deposits, etc.) change.
As you can see, the Eurostoxx 50 is an index that changes over time based on how the companies that are part of it are doing. In fact, in Spain, before there were 6 companies but, due to the low capitalization of some (Telefónica and Repsol) they left the list. Others, for example, Adidas, entered it after having favorable data that made it enter the top 50.
Is it now clearer to you what the Eurostoxx 50 is, who makes it up and what is this stock index for?