STOXX Monthly Index News: Slight Turnaround In The Banking Sector

The prevalence of banks in leading equity indices is declining: Due to the challenging environment, which led to concerns over margin pressures and capital losses, the banking sector had to handle high price depreciations. In the consequence, the Italian Unicredit will be excluded from the EURO STOXX 50 Index in September, after Credit Suisse and Deutsche Bank have already been replaced in the STOXX Europe 50 Index due to the fast-exit rule in August.

Allusions that the Fed could raise interest rates soon generally helped the banking sector in August. However, the sector performed low over the period of one year. Investors were concerned about enduring low interest rates and had doubts on banks’ solvency.

In combination with low interest rates this market environment caused investors to look for concepts that increase returns, but are also sensitive to risk. The EURO STOXX 50 Multi-Asset Momentum Risk Cap Indices are comprised of an equity and a bond component and combine momentum with volatility capping. This enables investors to profit from a cross-asset class strategy while simultaneously maintaining risk at pre-defined levels.

Please find additional information within the Monthly Index News or download our research paper about the EURO STOXX 50 Multi-Asset Momentum Risk Cap Indices.