{"id":10190,"date":"2024-02-08T16:25:37","date_gmt":"2024-02-08T16:25:37","guid":{"rendered":"https:\/\/ibkrcampus.eu\/?p=10190"},"modified":"2025-01-31T19:50:35","modified_gmt":"2025-01-31T19:50:35","slug":"reflections-on-the-european-equities-markets-performance-in-2023","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.eu\/campus\/traders-insight\/ibkr-market-insights\/reflections-on-the-european-equities-markets-performance-in-2023\/","title":{"rendered":"Reflections on the European Equities Markets performance in 2023\u00a0"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"728\" data-src=\"https:\/\/ibkrcampusdev.wpengine.com\/wp-content\/uploads\/sites\/3\/2024\/02\/pexels-juv-2106452-1100x728.jpg\" alt=\"Reflections on the European Equities Markets performance in 2023\" class=\"wp-image-10191 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/pexels-juv-2106452-1100x728.jpg 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/pexels-juv-2106452-700x463.jpg 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/pexels-juv-2106452-300x198.jpg 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/pexels-juv-2106452-768x508.jpg 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/pexels-juv-2106452-1536x1016.jpg 1536w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/pexels-juv-2106452-2048x1355.jpg 2048w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/728;\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">While 2022 main topics in the equities markets tended to be inflation, rising interest rates and conflict in Ukraine, 2023 concerns were the decline in inflation, how much interest rates would continue rising, and hopes that controlled inflation might lead to a lowering of rates.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The first quarter of 2023 got the year off to a good start. The market rose steadily until March, at which point, markets moved sideways without a clear direction for several months. In the month of November, a bullish rally began that looks to continue into 2024.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Using ERO as a European stock market benchmark, an ETF with 425 free float-adjusted market capitalization weighted equities, we can see this ETF gained 15.96% in 2023.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"820\" data-src=\"https:\/\/ibkrcampusdev.wpengine.com\/wp-content\/uploads\/sites\/3\/2024\/02\/Europe-equities-1-1100x820.jpg\" alt=\"SPDR\u00a0MSCI\u00a0EUROPE\" class=\"wp-image-10202 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Europe-equities-1-1100x820.jpg 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Europe-equities-1-700x522.jpg 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Europe-equities-1-300x224.jpg 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Europe-equities-1-768x572.jpg 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Europe-equities-1.jpg 1280w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/820;\" \/><\/figure>\n\n\n\n<p class=\"has-small-font-size wp-block-paragraph\">Source: <a href=\"https:\/\/ibkr.ie\">ibkr.ie<\/a> &nbsp;Past performance is not indicative of future results.&nbsp;<\/p>\n\n\n\n<p class=\"has-large-font-size wp-block-paragraph\">Sector Performance&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To compare various sectors of European stocks, the SPDR sector ETFs are a good proxy to use. General market sentiment has been positive, although there have clearly been two sectors that have stood out, one due to its extraordinary profitability, and another due to its under-performance, compared to others. Technology rose 35.11% while Consumer Staples rose a meagre 1.49%.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The following table shows the various Sector ETFs performance:&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><tbody><tr><td>Name&nbsp;<\/td><td>ISIN&nbsp;<\/td><td>Symbol&nbsp;<\/td><td>Performance 2023 %&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe UCITS ETF&nbsp;<\/td><td>IE00BKWQ0Q14&nbsp;<\/td><td>ERO&nbsp;<\/td><td>15.96%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Communication Services UCITS ETF&nbsp;<\/td><td>IE00BKWQ0N82&nbsp;<\/td><td>STT&nbsp;<\/td><td>15.30%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Consumer Discretionary UCITS ETF&nbsp;<\/td><td>IE00BKWQ0C77&nbsp;<\/td><td>STR&nbsp;<\/td><td>15.93%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Consumer Staples UCITS ETF&nbsp;<\/td><td>IE00BKWQ0D84&nbsp;<\/td><td>STS&nbsp;<\/td><td>1.49%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Energy UCITS ETF&nbsp;<\/td><td>IE00BKWQ0F09&nbsp;<\/td><td>STN&nbsp;<\/td><td>9.02%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Financials UCITS ETF&nbsp;<\/td><td>IE00BKWQ0G16&nbsp;<\/td><td>STZ&nbsp;<\/td><td>21.97%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Health Care UCITS ETF&nbsp;<\/td><td>IE00BKWQ0H23&nbsp;<\/td><td>STW&nbsp;<\/td><td>8.40%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Industrials UCITS ETF&nbsp;<\/td><td>IE00BKWQ0J47&nbsp;<\/td><td>STQ&nbsp;<\/td><td>27.24%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Materials UCITS ETF&nbsp;<\/td><td>IE00BKWQ0L68&nbsp;<\/td><td>STP&nbsp;<\/td><td>12.65%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Technology UCITS ETF&nbsp;<\/td><td>IE00BKWQ0K51&nbsp;<\/td><td>STK&nbsp;<\/td><td>35.11%&nbsp;<\/td><\/tr><tr><td>SPDR\u00ae MSCI Europe Utilities UCITS ETF&nbsp;<\/td><td>IE00BKWQ0P07&nbsp;<\/td><td>STU&nbsp;<\/td><td>13.90%&nbsp;<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Source: <a href=\"https:\/\/www.ssga.com\" target=\"_blank\" rel=\"noreferrer noopener\">www.ssga.com<\/a> and <a href=\"https:\/\/ibkr.ie\">ibkr.ie<\/a> Past performance is not indicative of future results.&nbsp;<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"821\" data-src=\"https:\/\/ibkrcampusdev.wpengine.com\/wp-content\/uploads\/sites\/3\/2024\/02\/Sector-europe-equities-1-1100x821.jpg\" alt=\"Sector investment Europe \" class=\"wp-image-10203 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Sector-europe-equities-1-1100x821.jpg 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Sector-europe-equities-1-700x522.jpg 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Sector-europe-equities-1-300x224.jpg 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Sector-europe-equities-1-768x573.jpg 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Sector-europe-equities-1.jpg 1289w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/821;\" \/><\/figure>\n\n\n\n<p class=\"has-small-font-size wp-block-paragraph\">Source: <a href=\"https:\/\/ibkr.ie\">ibkr.ie <\/a>&nbsp;Past performance is not indicative of future results.&nbsp;<\/p>\n\n\n\n<p class=\"has-large-font-size wp-block-paragraph\">Factor Performance&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In investing, a factor is any characteristic that can explain the risk and return performance of an asset. In recent years, ETFs mirroring certain factors have been developed making it easier to tailor an investment strategy to whichever factors one would consider important. Examples of factors are Dividend Yield, momentum, volatility, and growth [revenue or EPS].&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To evaluate performance of different factors in 2023, we are going to use a list of iShares ETFs.&nbsp; Due to greater diversification within the portfolios, the returns of ETFs invested in factors are much closer to the average return of the market, only the Growth factor obtains a return higher than 20% while the Dividend factor has a yield of less than 10%.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ETFs are the following:&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table has-small-font-size\"><table><tbody><tr><td>Name&nbsp;<\/td><td>ISIN&nbsp;<\/td><td>Symbol&nbsp;<\/td><td>2023 performance %&nbsp;<\/td><\/tr><tr><td>iShares Edge MSCI Europe Size Factor UCITS ETF&nbsp;<\/td><td>IE00BQN1KC32&nbsp;<\/td><td>IESZ&nbsp;<\/td><td>14.71%&nbsp;<\/td><\/tr><tr><td>iShares Edge MSCI Europe Quality Factor UCITS ETF&nbsp;<\/td><td>IE00BG13YG34&nbsp;<\/td><td>IEQD&nbsp;<\/td><td>15.14%&nbsp;<\/td><\/tr><tr><td>iShares Edge MSCI Europe Value Factor UCITS ETF&nbsp;<\/td><td>IE00BG13YH41&nbsp;<\/td><td>IEDL&nbsp;<\/td><td>14.45%&nbsp;<\/td><\/tr><tr><td>iShares Edge MSCI Europe Momentum Factor UCITS ETF&nbsp;<\/td><td>IE00BG13YJ64&nbsp;<\/td><td>IEMD&nbsp;<\/td><td>13.40%&nbsp;<\/td><\/tr><tr><td>iShares Edge MSCI Europe Minimum Volatility UCITS ETF&nbsp;<\/td><td>IE00BG13YK79&nbsp;<\/td><td>MVED&nbsp;<\/td><td>11.50%&nbsp;<\/td><\/tr><tr><td>iShares Euro Total Market Growth Large UCITS ETF&nbsp;<\/td><td>IE00B0M62V02&nbsp;<\/td><td>IDJG&nbsp;<\/td><td>20.86%&nbsp;<\/td><\/tr><tr><td>iShares Euro Dividend UCITS ETF&nbsp;<\/td><td>IE00B0M62S72&nbsp;<\/td><td>IDVY&nbsp;<\/td><td>4.50%&nbsp;<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\">Source: <a href=\"https:\/\/www.blackrock.com\" target=\"_blank\" rel=\"noreferrer noopener\">www.blackrock.com<\/a> and <a href=\"https:\/\/ibkr.ie\">ibkr.ie<\/a> &nbsp;Past performance is not indicative of future results.&nbsp;<\/figcaption><\/figure>\n\n\n\n<p class=\"has-small-font-size wp-block-paragraph\"><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"823\" data-src=\"https:\/\/ibkrcampusdev.wpengine.com\/wp-content\/uploads\/sites\/3\/2024\/02\/Factor-europe-equities-1100x823.jpg\" alt=\"Sector factor Europe \" class=\"wp-image-10198 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Factor-europe-equities-1100x823.jpg 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Factor-europe-equities-700x524.jpg 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Factor-europe-equities-300x225.jpg 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Factor-europe-equities-768x575.jpg 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Factor-europe-equities.jpg 1277w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/823;\" \/><\/figure>\n\n\n\n<p class=\"has-small-font-size wp-block-paragraph\">Source: <a href=\"https:\/\/ibkr.ie\">ibkr.ie<\/a> &nbsp;Past performance is not indicative of future results.&nbsp;<\/p>\n\n\n\n<p class=\"has-large-font-size wp-block-paragraph\">Market Volatility&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Regarding overall market volatility, the period of most tension was undoubtedly the month of March 2023, in which US bankruptcies and the rescue of Credit Suisse were the driving forces behind investors fears of a banking panic, but over time the problem did not worsen, and volatility returned to the mean. Due to the bull rally beginning November 2023, the next 3 months saw a decrease in market volatility.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"821\" data-src=\"https:\/\/ibkrcampusdev.wpengine.com\/wp-content\/uploads\/sites\/3\/2024\/02\/Volatility-V2tx-1-1100x821.jpg\" alt=\"Volatility Europe \" class=\"wp-image-10201 lazyload\" data-srcset=\"https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Volatility-V2tx-1-1100x821.jpg 1100w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Volatility-V2tx-1-700x522.jpg 700w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Volatility-V2tx-1-300x224.jpg 300w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Volatility-V2tx-1-768x573.jpg 768w, https:\/\/ibkrcampus.eu\/campus\/wp-content\/uploads\/sites\/3\/2024\/02\/Volatility-V2tx-1.jpg 1276w\" data-sizes=\"(max-width: 1100px) 100vw, 1100px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/821;\" \/><\/figure>\n\n\n\n<p class=\"has-small-font-size wp-block-paragraph\">Source: &nbsp;<a href=\"https:\/\/ibkr.ie\">ibkr.ie <\/a>&nbsp;Past performance is not indicative of future results.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While 2022 main topics in the equities markets tended to be inflation, rising interest rates and conflict in Ukraine, 2023 concerns were the decline in inflation, how much interest rates would continue rising, and hopes that controlled inflation might lead to a lowering of rates.\u00a0<\/p>\n<p>The first quarter of 2023 got the year off to a good start. The market rose steadily until March, at which point, markets moved sideways without a clear direction for several months. In the month of November, a bullish rally began that looks to continue into 2024.<\/p>\n","protected":false},"author":1282,"featured_media":10191,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[335,152,145,146,153,148],"tags":[289,336,1034,824,1040,1038,1039,291,314,1036,1035,1037,383,316],"contributors-categories":[149],"class_list":["post-10190","post","type-post","status-publish","format-standard","has-post-thumbnail","category-etfs","category-europe-middle-east-africa","category-ibkr-market-insights","category-macro","category-stocks","category-text-articles","tag-economic-data","tag-etfs","tag-europe","tag-factor-investing","tag-france","tag-germany","tag-italy","tag-macro","tag-market-outlook","tag-performance","tag-sector","tag-spain","tag-stock-market","tag-stocks","contributors-categories-interactive-brokers"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- 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