18 December 2019Reading time: 3 minutes

The AEX index seems to be finishing this year with a good final sprint and by now has amply surpassed the 600 points barrier. The result of the British elections, which brings more certainty around Brexit, led to more optimism among investors in mid-December. Also the talks between the United States and China regarding the trade dispute, contributed to a more positive sentiment on the worldwide stock market. 

Long recovery

It took 18 years for the AEX index to reach the same level again as at the start of this decennium. After 2001 the index collapsed due to the internet bubble and in 2008 the financial crisis followed. Last year the AEX index was pushed down by uncertainty regarding the trade dispute between the US and China. This year the main index in Amsterdam finally showed a solid recovery.

Heavy funds

The largest fund within the AEX index is Royal Dutch Shell. The stock price of the oil company is now 1,4 percent higher compared to the same period last year. The stock price of ASML is now even 80,9 percent higher on an annual basis. The stock price of heavyweight Unilever increased with 9,7 percent over the past year. Other funds with a relatively high weighting on the index are ING, which achieved a stock price increase of 7,97 percent over the past year, followed by RELX that also pulled up the AEX with an increase of 21,57 percent on an annual basis. The biggest loser within the AEX index is ABN AMRO with a stock price loss of 23,85 percent. 

Other European stock markets showed the same trend this year. The German DAX rose with 23,4 percent in one year. The French CAC 40 achieved a similar increase of 23,3 percent over the same period. In London however, the FTSI 100 stayed behind on the other European indices with an increase of 8,6 percent on an annual basis.

Expectations for 2020

The AEX index rose with 20,4 percent on annual basis and now (16 December, 2019) stands at 608 points. Investors must keep in mind that large fund managers often clean up their stock portfolios by the end of the year, which could cause stock price fluctuations for the bigger funds. It remains to be seen if the AEX continues to increase next year to the all-time high of 701 points hit in 2001, or that economical head winds will push down the index again. 

The future value of the index is subject to several political, industrial and sector specific as well as economic factors. Investors should consider these risks when making their investment decisions. Developments can be different at any time than investors anticipated on, which could result in capital losses. 

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14/05/2021 03:05:11