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Investment Solutions


Investment Solutions


Top Five European Stocks to Watch on the ASX (and How to Access Them with One Low-cost ETF)

Rene Anthony

Monday, June 21, 2021

Monday, June 21, 2021

This year, however, investors are warming to Europe once more. Thanks to global economies reopening from the coronavirus, and on the back of new fears that share prices of American businesses have overheated, Europe is seeing great interest again. 

This year, however, investors are warming to Europe once more. Thanks to global economies reopening from the coronavirus, and on the back of new fears that share prices of American businesses have overheated, Europe is seeing great interest again. 

This article was brought to you by our friends over at ETF Securities Australia. The views and opinions expressed in this article are those of ETF Securities Australia and may not reflect the views of Selfwealth or its associates.

Before investing in any ETFs, you should consult the respective product Product Disclosure Statement, which will be available on the fund website.

Europe fell out of favour with investors for several years. The Eurozone debt crisis, Brexit, the rise of populism. The crises seemed to pile up. Meanwhile, America went from strength to strength, boosted by FANG internet giants such as Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX) and Alphabet (NASDAQ: GOOGL).

This year, however, investors are warming to Europe once more. Thanks to global economies reopening from the coronavirus, and on the back of new fears that share prices of American businesses have overheated, Europe is seeing great interest again. 

In fact, year-to-date, stock markets spanning France, Germany, Italy, and the Netherlands among others have been performing as well as or even better than the high-profile US indexes, and well ahead of the ASX.

With these tailwinds in effect, below are five companies that we believe are well positioned, with investors able to gain exposure to these stocks on the ASX through one low-cost, diversified ETF. 

1. ASML Holding NV

Often described as the most-important company that no-one has ever heard of, ASML is a Dutch business that is among the most-crucial for making semiconductors. 

Semiconductors are the small and often overlooked componentry that make modern computing possible. In particular, ASML makes the machines that allow transistors to go on microchips, dubbed EUV lithography systems. 

The company sells these machines to semiconductor-makers like Intel and Samsung, which allow them to build better semiconductors. ASML EUV lithography machines are not cheap either, with the price usually going for around ‚¬138 million. 

Thanks in part to the boom in electric vehicles and cloud computing spurring demand for semiconductors, ASML share price has surged in recent years. But it has also been driven because ASML now has a near-monopoly position in EUV machines. 

2. L'Oreal S.A.

One of the most-iconic brands in global fashion, L'Óréal is the largest cosmetics company in the world. From shampoo, to hair dyes, to perfume, to lipsticks, they make it all. They own a lot of other brands that most Australians would recognise too, including Lancôme, Maybelline, Garnier, Ambi, and plenty more. 

L'Óréal's share price has surged over the past 10 years, driven by booming demand for its products in China. According to a review by consultancy Bain & Company, Chinese consumers are unstoppable in their thirst for French luxury goods. Mainland China luxury goods market grew 48% in 2020, Bain estimates. They project the growth will continue to 2025.

3. LVMH Moët Hennessy Louis Vuitton

LVMH is the luxury company par excellence. It has the luxury – pun intended – of having goods with extremely low price elasticity of demand. This means that no matter how expensive LVMH's champagnes, handbags, perfumes, clothes and all the rest become, people always buy them. 

The company has been in the news recently as it finalised the purchase of jewellery giant Tiffany & Co. It also struck a partnership with American rapper Jay-Z to buy 50% of his Armand de Brignac champagne brand for about $300 million, as part of the growing trend for celebrity-endorsed premium alcohol.

As with L'Óréal, LVMH has benefitted hugely from the rising middle-class in China and their passion for French luxury goods. 

4. Airbus SE

The one and only, the world largest airline maker, and the pride of German and French engineering. Airbus, not to mention its only major competitor Boeing, was hit very hard by COVID-19 as demand for overseas travel fell off a cliff. However, the company is benefitting from the 'reopening trade' as investors look for unloved "value" stocks that were hit hardest by Covid. 

Going forward, investors will be watching how many postponed and cancelled orders of Airbus planes come back to life. Qantas, for example, was forced to cancel an order of 12 A350s, which promised to provide non-stop flights to Paris, London and New York. Qantas will be revisiting its order at the end of this year. 

Airbus has also been ahead of the curve in exploring zero-emissions planes, with increasing research into hydrogen power.  

5. Pernod Ricard S.A.

Pernod is the force behind some of the world most-popular alcohol. Absolut Vodka, Jameson Irish Whiskey, Havana Club rum, Malibu coconut liqueur, Martell cognac, Aberlour scotch are just some of the many names that make up their stable. 

The company has an advantage over other alcohol businesses in that its sales and products are truly diversified. It has a foothold in most countries and was an early entrant into India and China, with its higher-end cognac proving popular in the latter. It also has a foothold in nearly every type of alcohol segment – champagne, rum, vodka, scotch, wine and all the rest. This allows it to respond to changing consumer tastes. 

An ongoing tailwind is the "premiumisation" of alcohol, with consumers voting for quality over quantity when drinking.


While gaining direct access to European stocks may be hard for many investors, the size and scale of this market is one that deserves attention. For investors wanting to buy some of the best of Europe as global economies reopen, the ETFS EURO STOXX 50 ETF (ASX: ESTX) can provide one diversified solution. 

ESTX follows the leading share market gauge for the Eurozone. It invests in 50 blue-chip companies from across Europe, including the above stocks, providing investors with exposure to some of the most well-known and best-performing names from the continent in a simple trade.  

For more information on the ETFS EURO STOXX 50 ETF (ASX: ESTX), please contact ETF Securities.

To invest in ASX-listed ETFs or any other ASX and US-listed securities, join Selfwealth today for flat-fee $9.50 brokerage and no other account fees or commissions!

ETF Securities Australia Client Services

Phone: +61 2 8311 3488



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