Indexy a trhy
MSCI Europe and Stoxx 600: How to Invest in European Equities
Key takeaways
- MSCI Europe includes approximately 430 companies from 15 developed European countries; Stoxx 600 covers 600 companies from 17 countries including Switzerland and Norway.
- European equity markets historically pay higher dividends than the US market — but this corresponds to lower historical price growth.
- The United Kingdom, France, and Switzerland together account for approximately 50% of both indices.
- For Czech investors: dividends from European equities are subject to 15% tax in the Czech Republic; an accumulating ETF is more advantageous.
MSCI Europe and Stoxx 600 are the two most widely followed European equity indices — both cover hundreds of companies from across the continent and serve as the basis for investing in Europe via ETF.
What these indices cover
MSCI Europe includes approximately 430 companies from 15 developed European countries. Stoxx 600 is broader: 600 companies from 17 countries, and additionally includes Switzerland and Norway, which are not in the EU. Both indices therefore cover Europe geographically in a similar way, differing in breadth of coverage and a few countries.
Dominant markets in both indices:
- United Kingdom: approximately 22–25%
- France: approximately 15–17%
- Switzerland: approximately 14% (Stoxx 600)
- Germany: approximately 13–15%
The character of European equities
The European market is historically more oriented towards value stocks and dividends than the US. Large European companies such as Nestlé, Roche, LVMH, Shell, and HSBC are typically mature, stable businesses with regular dividends.
This has two sides: higher dividends attract income-focused investors, but the lower share of fast-growing technology companies has meant that Europe has historically lagged behind the US market in total return.
Taxes and how to buy it as a Czech investor
Irish UCITS ETFs on MSCI Europe or Stoxx 600 are available at all standard brokers. The three-year time test exempts the gain from sale from tax. Dividends are taxed at 15% — an accumulating ETF reinvests automatically and no dividend tax liability arises on an ongoing basis. How DCA helps spread purchases over time is explained in the cost averaging guide. Global indices are discussed in the MSCI World article.
FAQ
What is the difference between MSCI Europe and Stoxx 600?
MSCI Europe includes approximately 430 companies from 15 countries, Stoxx 600 covers 600 companies from 17 countries and additionally includes Switzerland and Norway. Stoxx 600 is therefore broader, but both reflect a similar geographic distribution.
Why does Europe lag behind the US?
The European market is dominated by cyclical and value sectors (banks, industrials, energy), while the US has a strong technology component. Technology has driven returns upwards over the last decade — in Europe its weight is significantly lower.
Are dividends from European ETFs taxed?
Dividend distributions from ETFs are subject to 15% tax in the Czech Republic. An accumulating ETF reinvests dividends automatically without a taxable event — this is advantageous for long-term investors who do not need ongoing income.
Does it make sense to hold Europe separately if I already own MSCI World?
MSCI World includes Europe (approximately 25% of the weight). A separate European ETF makes sense for investors who deliberately want to overweight Europe above its share in the global index — for example when betting on European market undervaluation.