Top 5 portfolio holdings – Europe ex. UK Index Fund

Europe Index FundThis is part of a series of posts which detail the top 5 companies within an index fund for a particular world region. This article focuses on developed Europe excluding the United Kingdom (UK). My portfolio is composed of a range of low cost index funds which track the largest companies across the world.

The purpose of these articles is to understand more about a portfolio’s investments and prove that buying index funds is actually buying slices of real business which provide value and generate profits. Index funds contain a large number of company stocks, for example a FTSE 100 tracker would represent 100 companies. Only the top 5 holdings are outlined here.


Europe’s economy and target portfolio allocation

As I am based in the UK, stocks of UK companies are held in a separate UK index fund. Europe has an approximately 30% share of global nominal Gross Domestic Product (GDP), the total value of goods and services produced by a country in a given year. Germany is the largest economy in Europe and ranks fourth globally. The target portfolio allocation for developed Europe excluding UK shares in my portfolio is 15%. The following are the top five holdings in the Europe fund.

Nestlé SA (NESN.S)

Logo of Nestlé

Founded over 150 years ago in 1866, Nestlé is a Swiss multinational food and drinks company. Nestlé is one of the largest food companies in the world and produces a wide range of products including dairy products, ice cream, tea and coffee, baby food, pet food, medical food and bottled water. Many brands owned by Nestlé are household names and include Nescafé, Kit Kat, Milo, Coffee-mate, Purina, Nido, Nespresso, Stouffer’s and Maggi. Twenty nine Nestlé brands have annual sales of over CHF 1 Billion.

Nestlé makes up 3.99% of my developed Europe ex. UK index fund and has a projected dividend yield of 3.08%. The company’s 10 year annual return is 9.15%. Latest 5 year returns for Nestlé stocks are:

20122013201420152016
16.5716.242.425.14-0.48

Novartis AG (NVS)

Logo of Novartis pharmaceuticals

Novartis AG is a Swiss multinational healthcare solutions company. The company is one of the largest global pharmaceutical companies and was formed in 1996 following a merger of Ciba-Geigy and Sandoz Laboratories, both Swiss companies with long histories. Novartis is involved in research, development, production and marketing of a range of pharmaceutical products in the therapeutic areas of cardio metabolic, ophthalmology, neuroscience, oncology, immunology and dermatology.

Investing in the pharmaceutical sector adds diversity to my portfolio and exposure to companies resistant to economic downturns due to having always in demand products and services.

Novartis AG makes up 3.o6% of my developed Europe ex. UK index fund and has a projected dividend yield of 3.63%. The company’s 10 year annual return is 5.85%. Latest 5 year returns for Novartis AG stocks are:

20122013201420152016
15.0630.9818.66-4.27-12.18

Roche AG (ROG)

Logo of Roche Pharmaceuticals

Roche AG is another Swiss multinational pharmaceutical company in the Europe top 5. Diagnostics is the other business focus for Roche with core business areas of Diabetes Care, Molecular Diagnostics, Professional Diagnostics and Tissue Diagnostics. Roche was founded in 1896 and has its headquarters in Basel, Switzerland. It is the third largest pharmaceutical company in the world. As a large cap pharmaceutical company, Roche is expected to generate increasing revenues every year while paying Shareholders a healthy dividend.

Roche AG makes up 2.93% of my developed Europe ex. UK index fund and has a projected dividend yield of 3.14%. The company’s 10 year annual return is 6.32%. Latest 5 year returns for Roche AG stocks are:

20122013201420152016
23.0142.85-0.004.37-14.28

Total SA (TOTF.PA)

logo of Total SA and integrated French multinational oil and gas company

Total SA, a French multinational integrated oil and gas company, was founded in 1923. As one of the seven “supermajor” oil companies, Total is involved in areas such as upstream exploration and production, refining and chemicals, oil trading and shipping, supply, marketing and new energies. The company also operates in the sectors of power generation and renewable energy. Despite the dip in oil prices, it is certain that the need for energy, particularly from clean sources, will keep on growing throughout the world, ensuring future growth of the energy sector.

Total SA makes up 1.94% of my developed Europe ex. UK index fund and has a projected dividend yield of a solid 5.15%. The company’s 10 year annual return is -1.57%. Latest 5 year returns for Total SA stocks are:

20122013201420152016
2.9019.05-15.39-11.3215.61

Siemens AG (SIEGn.DE)

Siemens logo

Siemens AG, a German conglomerate electronics, engineering and manufacturing company, was founded in 1847. With headquarters in Berlin and Munich, Siemens has a large presence across the world. Business areas on which Siemens is focused include automation, building technologies, drive technology, energy, healthcare and transportation (rail, traffic and logistics). Siemens is also involved in power generation and renewables.

Siemens AG makes up 1.68% of my developed Europe ex. UK index fund and has a projected dividend yield of a solid 2.97%. The company’s 5 year annual return is 8.56%. Latest 5 year returns for Siemens AG stocks are:

20122013201420152016
19.2829.85-14.97-10.9030.07

Above are the top five holdings in the Developed Europe excluding UK index fund in my portfolio. For overviews of the top 5 companies in typical index funds for other world regions click below:




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