A group of seven high-performing European stocks, dubbed the "Eurostars," has surpassed the returns of the US "Magnificent 7" since 2020, while also exhibiting lower volatility.
Since the start of 2020, the Eurostars - Novo Nordisk, ASML, LVMH, Ferrari, Adyen, Schneider Electric, and Hermès - have achieved a total return of 224%, matching the performance of the US tech giants. However, the European stocks have demonstrated superior risk-adjusted returns with lower volatility.
Unlike the tech-heavy Magnificent 7, the Eurostars represent a diversified range of sectors, including healthcare, luxury goods, automotive, and industrial technology. This diversity, driven by strong trends like the digital revolution and the global energy transition, has resulted in significant growth and excellent shareholder returns.
While the Magnificent 7 boasts a combined market capitalisation exceeding $16 trillion, the Eurostars have a combined market cap just below $2 trillion. Despite the difference in size, the Eurostars' performance underscores that market success is not solely determined by market capitalization.
Aegon Asset Management emphasises the importance of recognizing the Eurostars' success and contributions to global market returns, highlighting their strong performance and diverse sector representation as key factors in their outperformance of the US giants.
