'Eurostars': The rise of Europe's answer to the US 'Magnificent 7'

Europe also boasts its own collection of high-performing stocks, referred to as the Eurostars - a term coined by Jordy Hermanns, Portfolio Manager at Aegon Asset Management.

The Eurostars comprise Novo Nordisk, ASML, LVMH, Ferrari, Adyen, Schneider Electric, and Hermès. Remarkably, since the beginning of 2020, this elite group of European stocks has not only matched but outperformed the robust performance of the US-based Magnificent 7.

"These companies have increased their weight and influence in benchmark indices. This winner-takes-all paradigm has had a significant impact on the global economy and financial markets," Hermanns commented in a research note.

Since the onset of 2020, Eurostars have delivered a phenomenal total return of 224%, translating to an annualised return of 30%.

This performance mirrors that of the Magnificent 7, which includes tech titans like Nvidia, Apple, Microsoft, Alphabet, Meta Platforms, Amazon, and Tesla.

 However, Hermanns highlighted that the seven European leaders exhibited a lower realised volatility of 23% compared to the Magnificent 7's 30%, underscoring their superior risk-adjusted returns.

Unlike the tech-centric Magnificent 7, Aegon Asset Management underscores that the Eurostars are spread across various sectors, including healthcare, luxury goods, automotive, and industrial technology.

Hermanns remarked that "this diverse composition not only makes the Eurostars a formidable counterpart to the US's tech giants but also a critical component of any well-diversified global investment portfolio".

The digital revolution has notably benefited ASML and Adyen. Novo Nordisk's growth has been fuelled by rising demand for healthcare services, particularly obesity treatments. Luxury brands such as