Subjective market review (10-Feb-2024).
Large companies are successful not only in the USA. The European version does much better in 2024. We are talking about the 4 largest European companies (see Figure 1), rates of return since the beginning of 2024 (YTD):
ASML +28.5%
SAP +20.7%
Novo Nordisk +17.2%
LVMH +10.1%
In Europe we have several main stock indices:
Euro Stoxx 50 (3 largest positions and their share in the index: ASML HOLDING NV 10.27%; LVMH 6.20%; SAP 5.11%)
STOXX Europe 600 (4 largest positions and their share in the index: NOVO NORDISK 3.42%; ASML HOLDING NV 3.33%; Nestle SA 2.69%; LVMH 2.0%). SAP is in 8th position with a share of 1.66%
MSCI Europe (4 largest positions and their share in the index: NOVO NORDISK 3.64%; ASML HOLDING NV 3.42%; Nestle SA 2.93%; LVMH 2.21%). SAP is in 9th position with a share of 1.76%
The US version of Mag7 is also doing well in 2024 - see Figure 2. Figure 3 shows European Mag4 and US Mag7 compared to other major equity indices.
Why large companies are so successful. Of course, financial results do their part plus dominant positions in their markets/products whose demand is exploding.
However there is also the argument that large companies are preferred by institutional investors as relatively safer from their perspective. Historically, such large "nifty-fifty" companies benefited from the preferences of institutional investors.
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