With the STOXX® Europe 600 benchmark trading at all-time highs, and closing at a new record in 12 sessions in 2025[1], let’s take a look at currency effects on index performance.
The STOXX Europe 600 currently has constituents whose shares are listed in seven different denominations. For investors who want to limit the impact of currency moves, the STOXX Hedged indices measure the returns of an underlying STOXX index while at the same time combining that performance with a hypothetical, rolling investment into one-month foreign-exchange forward contracts.
A USD-hedged investment in the STOXX Europe 600, for example, allows US-based investors to tap the index’s underlying constituent risk while limiting the risk from moves in the dollar relative to the euro and other European currencies.
Over the past ten years, dollar-based investors in the standard STOXX Europe 600 index (without a USD-currency hedge) have gained 75% including dividends after taxes (Figure 1, gray line),[2] less than the 90% obtained by euro-based investors (Figure 1, light blue line). The STOXX Europe 600 Monthly Hedged USD index, on the other hand, has risen 134% over the same period (Figure 1, gold line). The dark blue line shows the euro-hedged version of the benchmark, which hedges the euro against the currency move of non-euro denominated index constituents. That version has performed broadly in line with the unhedged benchmark in euros.
Figure 1: Index performance
Overall, positioning the portfolio against euro weakness over the period analyzed, has helped performance. Not taking any action, on the other hand, has been a drag for dollar-based investors. As of February 18, 2025, almost 90% of the STOXX Europe 600’s weight is in three currencies (Figure 2).
Figure 2: STOXX Europe 600 currency exposure
Foreign-exchange fluctuations can be an important variable in an index’s total return, particularly over short periods. The euro fell 22% against the greenback between December 2020 and September 2022, only to rebound 18% in the following seven months. The common currency is trading 8.1% below its price a decade ago relative to the dollar.
ETFs available
Amundi, the largest European ETF provider by assets,[3] introduced last November the Amundi STOXX Europe 600 UCITS ETF USD Hedged, which tracks the STOXX Europe 600 Hedged USD Net Return index. The new ETF adds to the Amundi STOXX Europe 600 UCITS ETF EUR Hedged, which was introduced in 2017. Both ETFs follow a physical replication method.
Amundi also manages the flagship Amundi STOXX Europe 600 UCITS ETF, which has over EUR 9.1 billion in assets.[4]
“At a time of increasing interest in Europe from overseas investors and volatility in foreign-exchange markets, the possibility to access a popular benchmark like the STOXX Europe 600 with a systematic control over currency fluctuations is a valuable addition to the index-based investment toolbox,” said Vincent Denoiseux, Head of ETF Investment Strategy at Amundi ETF, Indexing & Smart Beta.
The benchmark for a continent
With a fixed number of 600 components and spanning 17 countries, the STOXX Europe 600 offers the widest coverage among flagship European benchmarks in the industry. Nearly USD 22 billion in ETF investments track the index[5], which provides a broad yet investable representation of the region’s developed markets. A comprehensive family of subindices, strategies and investable products around the benchmark, including ETFs and listed derivatives, attracts many participants in this liquid investment index ecosystem.
For more on the STOXX Hedged indices, visit our index guide.
[1] Price only performance in euros. Data through February 18, 2025.
[2] Data through February 18, 2025. Includes dividend returns after taxes.
[3] Source: ETFBook, considering only providers with main headquarters in Europe.
[4] Source: Amundi, based on the standard strategy, Accumulation share type.
[5] Source: ETFBook.