What is an AEX Index tracker (ETF)?
The AEX is a relatively small index compared to others . Many people still choose to take a gamble on the home market, such as with an AEX ETF tracker . Companies that have established themselves in the Netherlands have a good image and it is also advantageous from a tax perspective to opt for an AEX index tracker.
The abbreviation ETF stands for Exchange Traded Fund. This allows you to invest in a specific index and hence the name index investing. This is possible with regard to the Nikkei, Nasdaq, Dow Jones Index or the AEX. ETFs are very functional because they allow you to spread your risk. You are not betting on a horse, but on the index as a whole. This is attractive to many people.
What does the AEX entail?
Dutch companies sell their shares on the Amsterdam stock exchange. There are 25 large companies that are part of the AEX. These companies have a lot of money in this market and are therefore quite powerful. The index is based on the size of these companies. Want to read more? Read: ‘ What is the AEX ‘.
Course but without dividend
The AEX may be a reliable way to invest, but the price you pay for this is that the price rises considerably less quickly compared to other indices. This is caused by the fact that the dividend payments are not included in the price. This is often the case with other indices.
What does AEX-ETF entail?
An AEX tracker tracks the AEX price as closely as possible. This is attempted by keeping a close eye on the shares of the 25 companies and by paying attention to the market capitalization. The weighted indexes are taken into account, so that the ETF can be invested in as well as possible.
Want to know which 25 companies make up the AEX? Read our blog: Composition of the AEX .
Getting started with AEX-ETF
Investing has never been easier than with the AEX index. Your ETFs rise with the value of the AEX index, and if it falls, your ETFs fall. You can easily start investing by investing in ETFs. This way, by buying just 1 product, you can already follow the entire price. So you are not focused on just 1 company, but you are linked to all 25 companies at the same time. This way you spread your risk well and the chance that something might go wrong is very small. Another big advantage of ETFs is that the management costs are below average. A beginner in the field of investing can benefit greatly from this.
Unfortunately, manipulation also plays a role in the AEX index
The AEX is a relatively small stock exchange and therefore it is relatively easy to manipulate the entire stock exchange. You do not have to put down as much money for this. A party can then pull out its wallet to manipulate the AEX to its advantage. This is often up instead of down, a remarkable observation. Bad news is almost always rejected or ignored.
Because mainly positive things are being brought out about the AEX, the picture seems rosier than it actually is. It is therefore almost unthinkable that shorting the AEX will actually succeed. Another characteristic of the AEX is the lunch increases. It is a fact that during lunch the AEX also takes a break: the turnovers are then much lower than normal.
The final auction, which is the last few minutes before the stock market really closes, is also often accompanied by a rise. Suddenly you see all investors waking up and the AEX shooting up. This is a big disadvantage, because you can’t really estimate what the stock market is going to do. This unpredictability makes it difficult to see what the stock market will look like in a few hours, or sometimes even a few minutes. It is crucial to always stay alert.
Stock market declines are not all bad. This way you can buy the shares for a much lower price than they are normally sold. This way you can make a lot of profit, if you keep a close eye on the stock market. Sometimes a decline comes quite unexpectedly. So stay on top of it! Think carefully about what can work to your advantage and do not rule anything out. This way you can probably get a large amount of money out of it!
The cold frog country: a different price trend of the AEX index
Our cold frog country is quite small, and this can also have an effect on the stock exchange. The companies that are on the stock exchange do not only get their money from the Dutch economy, so the rate of the AEX does not have to go together with the national rate of the Netherlands.
Not only are the companies very internationally oriented, the investors also come from far and wide. The AEX is not only geared towards the Netherlands, but other continents also have a considerable impact on the stock exchange. Companies that have shares in the AEX will not only respond to national news, but news from other continents can also reach the AEX well (in a negative and positive way).
America is a real leader in the world market in this respect. You notice that the AEX mainly reacts to what is happening in this country. Everything is followed very closely with regard to this news. European news often has too little power to influence the AEX.
So there are many different factors that can influence the AEX. The AEX can therefore sometimes be quite volatile, and the fluctuations seem difficult to explain at first glance.
A number of companies have a finger in the pie
There are not many companies that have shares on the AEX stock exchange. The companies in the AEX have a weighting. Companies that are larger therefore have a heavier weighting and thus have more influence on the price than smaller companies. This keeps it fair for everyone.
This may seem fair, but it does create competition between companies. The largest companies can collude and completely control the AEX. Smaller companies can only watch this.
It could be that the AEX was red at first, but that some large company (think Unilever) can pull the stock market out of the valley again. Fortunately, these large companies provide stability, but it could also go very differently. Of course, you don’t know what the future will bring, and these companies don’t have a crystal ball either. So we’ll have to wait and see. A stock market simply fluctuates, and so does the AEX.
The AEX index tracker is everyone’s best friend
The AEX index tracker ensures that the price does not go down so quickly. So you have a bit more certainty and you do not have to worry at night about possibly losing your money. The stable market is a wonderful prospect for people who do not want to take too much risk, but investors who mainly want low prices and a stock market that lives, should look for another price.
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