The Netherlands is the fifth largest economy of the European Union and one with the brightest future. We analyze the most important stock market indices in the Netherlands.
- AEX (Amsterdam Exchange Index)
- AMX (Amsterdam Midkap Index)
- AScX (Amsterdam Small Cap Index)
- MSCI Netherlands
The Netherlands, also known as Holland, has the fifth-largest economy in the European Union and the Euro zone. Only Germany, France, Italy and Spain have larger economies.
However, the Netherlands has the highest GDP per capita and lowest public debt of these 5 countries. In addition, its economy is much more dynamic than the rest due to a lower level of regulation.
Some of the largest listed Dutch companies are ASML, Unilever, Royal Dutch Shell, and Philips. Even the brewery Heineken trades on the Amsterdam stock exchange.
For those who want to invest in the Dutch economy but do not want to choose individual stocks, an ETF can be a good option.
To pick the right ETF, it is important to be familiar with the index that our fund is going to replicate. Next, we analyze the most important stock market indices for the Netherlands.
AEX (Amsterdam Exchange Index)
The AEX stock index is the most famous in the Netherlands. It was introduced in 1983, over four decades ago, and is made up of the 25 largest companies on the Amsterdam Stock Exchange. Therefore, only large corporations are represented.
The AEX is calculated and published by Euronext, the company that owns the Amsterdam stock exchange, in addition to the NYSE.
Companies within the index are weighted according to their free float-adjusted market capitalization. Some of the companies in the AEX are ASML, Unilever, ING and AkzoNobel.
If you want to learn more about the AEX, you will find it on the Euronext website.
AMX (Amsterdam Midkap Index)
The AMX is the second-tier index of the Amsterdam Stock Exchange. Also published by Euronext, the AMX was first introduced in 1995.
The index is made up of the next 25 largest companies traded in Amsterdam after the 25 that are part of the AEX. This means that if we sort the companies by their market capitalization, AMX companies would be positioned 26 to 50.
Thanks to that, the AMX allows us to invest in mid-cap companies. Among them we would find the airline Air France-KLM, BE Semiconductor and TomTom. As you can see, some of these corporations also operate globally.
You will find more information on the official link to the Euronext website.
AScX (Amsterdam Small Cap Index)
Finally, the AScX is the third-tier stock index of the Amsterdam Stock Exchange, whose origin dates back to 2005.
The AScX is composed of 25 companies as well, and these are the ones that come after the 25 of the AEX and the 25 of the AMX. Therefore, these are mostly small-cap stocks.
In many countries, small-cap companies tend to be focused on the local economy. However, because the Dutch economy is so deeply integrated with the economies of other countries, many of the AScX companies are also very internationalized.
The Euronext website can provide you with additional information.
Another option for investing passively in the Netherlands is by choosing an ETF that tracks the MSCI Netherlands.
The MSCI Netherlands, published by the US company MSCI, is another of the main stock market indices for the Netherlands. It is made up of all Dutch companies that can be found in the global MSCI World Index.
The exact number of stocks in the index fluctuates based on how many companies meet the criteria to be included, and is usually between 20 to 25. These are weighted according to their market capitalization adjusted for free float. As a result, the correlation between the MSCI Netherlands and the AEX is very high.
More details are available on the MSCI website.
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And if you want to learn about investing in another medium-sized economy in Europe, check out this link:
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