A weaker US dollar helped stocks recover in April, but extended this year’s losses for euro-based investors.
The STOXX® World AC added 1.1% last month when measured in US dollars and including dividends, but lost 4% in euros. The STOXX® Global 1800 index also climbed 1.1% in dollars and fell 3.9% in euros. The greenback retreated 4.8% against the common currency over the month.
The Eurozone’s EURO STOXX 50® lost 1.1% in euros in April[1], while the pan-European STOXX® Europe 600 slid 0.5%. Germany’s DAX® increased 1.5% in the month. MDAX®, which gauges the performance of German mid-caps, jumped 4.9%.
The STOXX® North America 600 fell 0.2% in dollars. The STOXX® USA 500, which last quarter posted its worst quarter relative to the STOXX Europe 600 since 2015, shed 0.4%.
The STOXX® Asia/Pacific 600 jumped 4.9% in dollars. The STOXX® Developed World climbed 1% in dollars and fell 4.% in euros. The STOXX® Emerging Markets gained 1.2% and fell 3.8%, respectively.
Figure 1: STOXX Equity World indices’ April risk and return
Figure 2: STOXX Benchmark indices’ April risk and return
Figure 3: DAX indices’ April risk and return
| For a complete review of all indices’ performance last month, visit our April index newsletter. |
Stocks post biggest daily drop since 2008
President Trump on April 2 announced a list of blanket tariffs on all trading partners, raising concerns that a shock to trading flows would derail the global economy. The STOXX Global 1800 fell 5.8% on April 4, its steepest one-day loss in almost 17 years, as China lifted its own duties on US imports, unleashing a tit-for-tat commercial war between the world’s biggest economies.
Figure 4: Total annual % returns for STOXX World AC index
Figure 5: Select STOXX benchmarks’ returns since 2023
Volatility rises slightly
The VSTOXX® (Eurozone equity volatility), which tracks the prices of EURO STOXX 50 options traded on Eurex, rose to 22.5 from 22.1 in March. A higher VSTOXX reading suggests investors are paying up for puts that offer insurance against stock price drops. The VDAX®, which measures volatility in German equities, climbed to 23.4 from 22 a month earlier.
Factor investing
Among the STOXX Factor indices, the Momentum signal led gains last month (Figure 6).
Figure 6: STOXX Factor (Global) indices’ April risk and return characteristics
Climate benchmarks
Within climate benchmarks, the ISS STOXX® Developed World Net Zero Transition added 0.9%. The index is focused on net-zero targets and real-world transition-aligned metrics, and includes all industries featured in the parent universe.
The STOXX® Global 1800 Paris-Aligned Benchmark (PAB) rose 1%, while the STOXX® Global 1800 Climate Transition Benchmark (CTB) gained 0.8%. The PAB and CTB indices follow the requirements outlined by the European Commission’s climate benchmarks regulation.
Sustainability indices
The STOXX® Global 1800 ESG-X index rose 1.5% in the month. The STOXX® ESG-X indices are versions of traditional, market capitalization-weighted benchmarks that observe standard responsible exclusions.
The DAX® ESG Screened increased 1.2%. The index reflects the composition of the DAX benchmark minus companies that fail to pass norms-based and controversial weapons screenings, meet minimum ESG ratings or are involved in certain business activities considered undesirable from a responsible investing perspective.
Within indices that combine exclusions and best-in-class ESG integration, the EURO STOXX 50® ESG index rose 0.2% over the month. Germany’s DAX® 50 ESG index (+1.8%)[2], which excludes companies involved in controversial activities and integrates ESG scoring into stock selection, outperformed the benchmark DAX in the month.
The STOXX® Global 1800 SRI added 1.2%. The STOXX SRI indices apply a set of carbon emission intensity, compliance and involvement screens, and track the best ESG performers in each industry group within a selection of STOXX benchmarks.
Thematics, digital assets
Twenty-five of 41 STOXX® Thematic indices outperformed the benchmark STOXX Global 1800 last month. The STOXX® Europe Total Market Defense Capped (+8.3%), which was introduced in March, had the best performance in dollars in the suite.
The STOXX® Digital Asset Blue Chip index, which aims to track high-quality assets that represent the crypto universe today, jumped 4.1% in the month.
Dividend strategies
Dividend strategies had strong performances in dollars in the month that ended. The STOXX® Global Maximum Dividend 40 (+6% on a net basis) selects only the highest-yielding stocks. The STOXX® Global Select Dividend 100 (+1.9%) tracks companies with sizeable dividends but also applies a quality filter such as a history of stable payments.
Minimum variance
Minimum variance strategies outperformed in Europe but underperformed in the US. The STOXX® Global 1800 Minimum Variance rose 0.5% and the STOXX® Global 1800 Minimum Variance Unconstrained gained 0.8%.
The STOXX Minimum Variance Indices come in two versions. A constrained version has similar exposure to its market capitalization-weighted benchmark but with lower risk. The unconstrained version, on the other hand, has more freedom to fulfill its minimum variance mandate within the same universe of stocks.
[1] Throughout the article, all European indices are quoted in euros, while global, North America, US, Japan and Asia/Pacific indices are in US dollars.
[2] Figures in parentheses show last month’s gross returns.