What Is the Dow Jones Euro STOXX 50?

The Dow Jones Euro STOXX 50 is a stock index that represents 50 of the largest companies in Europe based on market capitalization. The index, first reported in 1998, is reconstituted annually, and weightings are adjusted quarterly to account for proportional changes in underlying company market caps.

Key Takeaways:

  • The Dow Jones Euro STOXX 50 is a stock index that represents 50 of the largest companies in Europe based on market capitalization.
  • The index is reconstituted annually, and weightings are adjusted quarterly.
  • The Dow Jones Euro STOXX 50 is selected from an aggregate of the 18 Dow Jones STOXX 600 Supersector indices.
  • The index captures about 60% of the free-float market cap of the EURO STOXX Total Market Index (TMI) for 12 European countries.

Understanding Dow Jones STOXX 50

The Dow Jones STOXX 50 is selected from a stock universe that is an aggregate of the 18 Dow Jones STOXX 600 Supersector indices. The index captures about 60% of the free-float market cap of the EURO STOXX Total Market Index (TMI) for 12 European countries. Each sub-index places its largest members on a selection list, which is then ranked by market cap to choose the STOXX 50 members.

The Dow Jones STOXX 50 index closely resembles the Dow Jones EURO STOXX 50 in methodology and construction, with the exception that it does not limit company selection to businesses that have fully transitioned to the euro currency.

The index limits the weighting of any one member to 10%, but no sector limitations are applied to the index's construction. As such, banking companies dominate the STOXX 50. The index is meant to capture blue chip companies in the region, so the average weighted market cap is large.

EURO STOXX 50

The EURO STOXX 50 is a stock index of Eurozone stocks designed by STOXX, an index provider owned by Deutsche Börse Group. According to STOXX, its goal is "to provide a blue-chip representation of supersector leaders in the Eurozone." It is made up of 50 of the largest and most liquid stocks.

The EURO STOXX 50 Index is derived from the 19 EURO STOXX regional supersector indices and represents the largest supersector leaders in the Eurozone in terms of free-float market capitalization. The index captures about 60% of the free-float market capitalization of the EURO STOXX Total Market Index, which in turn covers about 95% of the free-float market capitalization of the represented countries.

STOXX

STOXX Limited is a globally integrated index provider. The provider covers the world markets across all asset classes—developing, maintaining, distributing, and marketing a comprehensive global family of strictly rules-based and transparent indices. STOXX is a wholly-owned subsidiary of Deutsche Börse Group. STOXX calculates more than 7,500 indices and acts as the marketing agent for Deutsche Börse indices like DAX.

STOXX indices are licensed to financial institutions and other users for use with exchange-traded funds (ETFs), mutual funds, futures, options, structured products, and other purposes.