Stoxx600 (MEUD) : And now what?

Lyxor stoxx 600 Net Return (MEUD) - 11/02/19

Short Term strategy: Neutral (50%) / Trend =
Long Term strategy: Negative (35%) / Trend =

Characteristics of the ETF

The MEUD ETF (Lyxor) created in 04/2013 replicates the STOXX600 Net Return index which is composed of the 600 largest European stocks representative of the main sectors, while the stocks ​​of the Euro zone represent approximately 52% of the index, there is therefore a significant exposure to other European currencies, in particular the British Pound and the Swiss Franc.

The fees of the ETF MEUD are quite low at 0.07% and the AUM is €1425M. Replication is direct (physical) and there is a dividend capitalization policy.

Alternative ETFs: C6E (Amundi in Euro), ETZ (BNP Paribas Easy in Euro), EXSA (iShares in Euro)

Index & components

The MEUD (Lyxor) tracker replicates the European benchmark, which enjoys a very important depth with 600 holdings ​​and a great diversity by its exposure to the main sectors and countries of the European Union, including outside of the eurozone.

This index is a benchmark for the European markets, and we analyze its stock market behavior with great attention because the evolution of this index partly conditions our sectoral and geographic strategy.

The index is fairly balanced in its weighting with 4 major sectors that represent two thirds of the capitalization. In the first position is the cyclical and sustainable consumer goods sector (22%), which includes food giants such as Nestlé or AB-Inbev, as well as luxury, cosmetics and ready-to-wear brands like LVMH or Inditex as well as the automotive sector; financial (19%) industry (14%) and health (14%). In this index, energy-related values ​​represent only 7% and raw materials 8%. In addition, it should be noted that there is a certain level of currency risk in this index consisting of 24% of British securities and 14% of Swiss securities, even if the securities concerned are international and fairly exposed to the dollar.

The STOXX600 is very representative of the European economy because of its sector weighting, which is less favorable to oil than in some national indices (like the CAC40), while the financial sector (banks + insurance) remains a key compartment with 10% of the weighting but without reaching the weight of the Italian or Spanish indices (30%). This balanced weighting allows MEUD to have lower volatility than the national indices, as this index is much more diversified and without sector bias.

The ETF MEUD has the advantage of replicating a broader index than the Eurostoxx50 and which also incorporates smaller capitalizations, but with a more dynamic path.

The European economic cycle is currently weakening, which is validated both by the PMIs datas and also the market consensus for corporates which is adjusting lower at quick pace for 2019 results expectations. The ECB remains a factor of stabilization and the monetary normalization should be very progressive in the absence of inflation .


Latest developments

The Stoxx600NR posted a drop of 10.7% in 2018 after a rise of 10.6% in 2017 justified by the double-digit growth of the companies' results.

The year 2018 ended with a sharp correction due to an ongoing global economic slowdown, which particularly affects Europe, including Italy, which is now in recession, and Germany, which is experiencing the downturn in the automotive sector while the Chinese slowdown is also penalizing for the entire industrial sector. Only luxury and discretionary consumption seems to be playing out for the moment.

The political problems, Brexit in the first place, seem to weigh on the index as well as the phenomenon of yellow vests in France and the actions of the populist government in Italy.

Weekly data

The weekly chart shows a failure of the index to cross the EMA100, which brought a bearish reaction at the end of the week. The EMA26 has been broken, and it is now a matter of damage control in the short term. The major support for this structure is materialized by the EMA200, whose confirmed bearish crossing (weekly closing) would announce the return of the downward trend.

Daily data

On the daily chart we can see the failure of the prices to cross the EMA200, which triggers a pull-back towards EMAs20,26 and 100. The MACD also threatens to cross downwards which pleads for a deepening of the correction. The first phase of the rebound is coming to an end and the question of the next phase is now in question: continuation of the rebound or return to the downtrend? For the moment it is a pause in the rebound phase but the situation can change quickly.


MEUD is a UCITS ETF, listed in EUR, which seeks to replicate the STOXX Europe 600 (Net Return) EUR index (600 european companies)



Inception date 03/04/2013
Issuer Lyxor
Expense ratio 0,07%
Benchmark Stoxx 600
Ticker MEUD
ISIN LU0908500753
EU-SD Status Out of scope
Exchange Euronext Paris
Assets Under Management 1 425 M€
Replication method Direct (Physical)
Dividend Capitalization
PEA (France) No
SRD (France) No
Currency risk Yes
Number of Holdings 600
Risk 3/5

Country Breakdown

United Kingdom 24%
France 17%
Germany 15%
Switzerland 14%
Netherlands 6%
Spain 5%
Sweden 4%
Others 15%

Sector Breakdown

Financials 19%
Indutrials 14%
Consumer Staples 13%
Health Care 13%
Consumer Discretionary 9%
Materials 8%
Energy 7%
Others 16%

Top Ten Holdings

Nestlé 3%
Novartis 3%
Roche Holding 2%
Total 2%
Royal Dutch Shell 2%
BP 2%
Sanofi 1%
SAP 1%
Glaxosmithkline 1%