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19/10/2021

Euronext 100: 2021 values and investing in N100

Euronext is the main stock exchange in the euro zone, bringing together 25 leading stocks. This hive of activity includes more than 1,450 issuers with a total market capitalisation of EUR 4,500 billion. 

This venture encompasses 7 European stock markets, namely Paris, Oslo, Milan, Lisbon, Dublin, Brussels and Amsterdam. At last count, as of early January 2021, it included 1,493 companies with high index values. Note that Euronext is itself a publicly traded company. The company offers various assets such as stocks, bonds, stock indices and commodities. 

In the seven years that the company has been on the stock market, its share price has risen by 328%. It has risen from 20 euros at the time of its IPO to 85.60 euros today.

Euronext, with its 100 or so large-cap stocks, would be an excellent investment opportunity.

This guide is designed to help you make your decision. 

Introduction to Euronext 

History of Euronext 

On 22 September 2000, the Paris (ParisBourse), Brussels (BXS) and Amsterdam (AEX) stock exchanges merged to form Euronext. Euronext's mission is to ensure the operation, security, transparency and development of the stock markets and exchanges in the countries where it operates. The company is listed on the stock exchange on 6 July 2001. 

In April 2007, the index joined forces with the NYSE (New York Stock Exchange) and a new stock exchange operator spread over two continents was created, namely NYSE Euronext. At the end of 2012, Intercontinental Exchange acquired NYSE Euronext. The new buyer separated Euronext from the NYSE Euronext group and made it an independent company, leading to the birth of Euronext N.V. Euronext N.V. was listed on the stock exchange on 20 June 2014. 

In 2019, Euronext competed with Nasdaq to acquire Oslo Bors, which it succeeded in doing with the support of the Norwegian government. In 2021, the company celebrated the success of its acquisition of Borsa Italiana, for which it competed with Deutsche Börse and SIX Group.   

Euronext activities

  • Euronext operates under the supervision of market authorities and in accordance with their regulations. In France, the authority is the AMF (Autorité des marchés). Euronext offers companies and investors three segments of activity: listing (admission of companies to the financial market, publication and updating of the list and prices of securities and derivatives traded) 
  • exchange and negotiation between market participants (matching of buy and sell orders);
  • dissemination of price and market information. 

Euronext has the ability to:

  • implement market rules
  • admit new companies 
  • control members of its markets 
  • admit service providers wishing to become members of its markets. 

Euronext stock market data 

  • Creation of Euronext: 22 September 2000 
  • Euronext IPO: July 6, 2001
  • IPO share price: 24 euros 
  • Creation of Euronext N.V.: June 2014
  • Listing on Euronext N.V.: 20 June 2014
  • Price of the share at the time of the IPO: 20 euros 
  • Share price on 14 May 2021: 85.60 euros

Presentation of Euronext 100 (N100) 

With more than 600 benchmark indexes of all sizes and profiles, Euronext is the leading index provider in Europe. The group has its own indexes, namely the Euronext 100 (N100) and the Next 150, and also manages several European indices, including the CAC 40, the CAC Next 20, the BEL 20, the AEX, the AMX and the PSI 20. 

Characteristics of Euronext 100

Euronext 100 has an Isin code of FR0003502079. It is the stock market index of the 100 most capitalized stocks on Euronext. 

Composition of the Euronext 100 

The N100 includes the 100 companies with the largest market capitalisations. These companies are based in the European countries whose markets are managed by the group. Its composition is updated every quarter. This means that new companies enter and others leave according to the variation in their capitalisation.

Some of the companies making up the N100 as of May 2021 include AB Inbev, Air Liquide, Airbus, Equinor, Flutter Entertain, Kering, LVMH, L'Oreal, Royal Dutch Shell, Sanofi and Unilever. 

Advice before investing in Euronext 100  

Before making any investment decisions, it is important not to confuse Euronext with Euronext 100 and to differentiate between the different stock market products offered by the company. 

Difference between Euronext, Euronext products and Euronext 100

As a reminder, Euronext N.V., more commonly known as Euronext, is a listed company. You can therefore invest in its shares, whose Isin code is NL0006294274. You can buy or sell this company's shares like any other listed company. Explicitly, owning Euronext shares makes you a Euronext shareholder. 

As an exchange, Euronext manages financial products. These products can be shares, bonds or other derivatives. These assets come from the largest European groups, such as Alstom. You can therefore invest in Alstom via Euronext. Note that being a shareholder of Alstom does not make you a shareholder of the company Euronext. 

Finally, there is Euronext 100, which we have presented as one of the Euronext stock market indexes. It is also possible to invest in this index through an index fund or derivatives. With these products, you can invest on the price variations of the N100 index without having to physically buy the shares of the 100 companies that make it up. 

How can you invest in the Euronext 100 index ? 

To invest in the N100 index, you need to follow two steps: 

  1. Choose a type of investment 
  2. Choose an investment platform

Choose a type of investment 

  • Classic index funds: this is an investment fund that closely replicates the performance of the N100 and allows you to invest in a pool of money to buy all the stocks in the index. Investing in an index fund is simple, accessible and cheap. Traditional index funds are valued at the close of each trading day. 
  • ETFs or trackers: this is a type of index fund that can be traded in real time during market hours. It allows you to invest in all the stocks that make up the Euronext 100 with a single order, instead of placing 100 buy orders. As trackers replicate the performance of a stock market index, if the Euronext 100 rises by +12%, the Euronext 100 tracker also rises by +12%. 
  • Individual stocks: This is a type of investment where you must buy each of the 100 stocks in the index. This is a long, tedious and expensive process. You have to make 100 separate trades for each stock, either buying or selling. You manage 100 stocks at a time, which means you have to evaluate the performance of each one. 

Choose your investment platform

There are several options available:

Online brokers and trading platforms 

Online brokers offer low rates. Their platforms are easy to use even for beginners in the stock market. Some online broker sites offer some investment tips through guides or blog posts.  

Robo-advisors 

This solution requires less involvement on your part. Robo-advisors use powerful algorithms to manage transactions. Their preferred investment is ETFs. They are available 24/7. Some robo-advisors provide their clients with a human advisor with whom they can discuss their strategy. Investing via robo-advisors allows you to save on management fees. 

Financial advisors 

These are professionals who have in-depth knowledge of stock market investment and finance in general. They can provide you with sound advice and personal guidance for every investment decision. However, their services are expensive. Moreover, you don't really need their guidance for an investment in the N100 index. This type of investment is less complicated. 

The Euronext share price 

As seen before, you have three options to invest in Euronext: buying Euronext shares, buying assets controlled by Euronext or investing in the Euronext 100 index. We’re going to focus on the last point.

Current Euronext 100 price 

In one year, from May 15, 2020 to May 14, 2021, the price of the Euronext 100 index increased from 872.77 points to 1,249.78 points. It thus recorded an increase of 43.19% in 52 weeks. If we follow the evolution of its price for 5 years, we can see that it suffered a historic decline in March 2020 because of the Covid-19 pandemic. 

How to follow the Euronext 100 index ? 

You can follow the real-time evolution of the N100 price directly on the trading platform of your online broker. Many other websites specialized in the stock market also publish the real-time evolution of this index. Finally, you can go directly to the Euronext website. The latter also allows you to follow the price of its own assets as well as the price of the assets listed on its market. 

Factors influencing the Euronext 100 price

The price of the Euronext 100 varies according to the fluctuation of the stock prices of the companies that make up the index. The supply and demand of the assets making up the N100 therefore have a direct impact on the value of this index. 

It is also necessary to pay attention to the economic and financial situation of the Euronext 100 companies. Based on this idea, it is necessary to monitor the evolution of the Eurozone economy. Indeed, a growth or a recession of the European economy can impact the economic health of its largest companies. 

Other factors such as inflation and currency depreciation may also influence the price of the Euronext 100 Index. 

Should you invest in Euronext 100 in 2021? 

After the historic falls of the first quarter of 2020, the Euronext 100 is starting to recover. Does this herald an economic recovery for the whole of 2021? The IMF (International Monetary Fund) forecasts growth in the region of 5.5% for the 2021 global economy. This could give a boost to N100 companies. Of course, one has to analyze the actual economic situation without relying too much on the various forecasts. As with all stock market products, the Euronext 100 is subject to fluctuations. Nevertheless, it remains an interesting asset, especially because of the companies that make it up. 

If you are interested in this investment, seek the help of a trading coach to train you and guide you in the implementation of an appropriate investment strategy. 

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