Goldman Sachs identifies 11 European stocks as potential diversification options

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Goldman Sachs,European Stocks,Diversification

Goldman Sachs strategists have identified 11 stocks in the European benchmark index STOXX 600 as potential diversification options for investors looking to reduce exposure to the US Big Tech sector. The stocks, with a total market capitalisation of around €2.7 trillion, include healthcare, consumer staples, and tech sectors.

LVMH CEO Bernard Arnault presenting the group's 2023 annual results in Paris in January. LVMH is one of the 11 stocks whose first letter spell out the word Granolas.

They identified 11 stocks, among the largest stocks in the European benchmark index STOXX 600. The stocks had a total market capitalisation of around €2.7 trillion as at end-February, investment research firm Morningstar wrote.The US, on the other hand, has the Magnificent 7, a term coined by Bank of America and named after the gunmen in the Western movie of the same name. They are Alphabet, Apple, Google, Meta Platforms, Microsoft, Nvidia and Tesla.

Goldman Sachs added that these growth stocks are also investing three times in their growth compared with the rest of the market. With a high reinvestment rate, this should allow them to compound earnings over time. In a research note in February, it wrote that “while the European economy has its problems, the biggest European companies are pursuing growth all over the world... and that makes them quite attractive”.

ETFs that track this index include the iShares STOXX Europe 50 UCITS ETF EUR Dist or the Deka STOXX Europe 50 UCITS ETF. These funds have Novo Nordisk, Nestle, LVMH and GSK.

 

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