The value style has already burnished its reputation in the stockmarket. After a long period of dominating growth, investors have rediscovered the merits of discounted companies with solid fundamentals. To gauge the performance of this theme in Europe, MSCI has designed a dedicated barometer, the MSCI Europe Enhanced Value Index, from which several ETFs are derived.
What is an index for?
The MSCI Europe Enhanced Value Index aims to represent the performance of equities in Europe's developed markets that display above-average value characteristics.
Unlike the parent index (MSCI Europe), which weights companies solely by market capitalization, this strategy selects and weights stocks based on three fundamental valuation criteria:
- the price-to-book ratio (P/B);
- the price-to-forward-earnings ratio (Price-to-Forward Earnings);
- enterprise value relative to cash flow from operations (EV/CFO).
The index therefore isolates the Value factor within the universe of European large and mid caps.
Technical characteristics
This index is calculated and maintained by MSCI. It was launched on September 23 2014 (with a backtested history going back to 1998). It covers 15 developed European countries.
The selection is demanding: of the 403 stocks in the parent index, MSCI Europe Enhanced Value retains only 150.
The index is calculated here in euros (EUR) and in a "Net Return" (NR) version, meaning that dividends paid by companies are assumed to be reinvested after tax deductions.
Financial characteristics show a clearly Value profile, with a price/earnings ratio (P/E) of 13.86 versus 17.18 for the parent index, and a higher dividend yield (3.84% versus 2.89%).
Top holdings and geographic and sector exposure
The index offers concentrated exposure to the companies deemed to be among the cheapest in the market.
The top five holdings (as of 31 December 2025) are:
- British American Tobacco (3.83%);
- Siemens (3.7%);
- Novartis (3.60%);
- Sanofi (2.92%);
- HSBC Holdings (2.89%).
- BNP Paribas (2.35%);
- Banco Santander (2.34%);
- GSK (2.19%);
- TotalEnergies (2.17%);
- Bayer (2.14%).
Geographically, the breakdown differs slightly from the broad index, with a leading trio made up of Germany (23.21%), the United Kingdom (22.24%) and France (22.14%).
The sector structure is typical of Value investing, favouring cyclical and financial sectors to the detriment of technology or luxury:
- Financials: 24.49%;
- Industrials: 19.08%;
- Health Care: 13.74%;
- Consumer Staples: 9.04%;
- Consumer Discretionary: 8.16%.
- The technology sector accounts for just 7.2% of the index.
Short- and medium-term performance
The index delivered a spectacular 2025, significantly outperforming the broader market.
In terms of historical performance (in euros):
- 1 year: +34.68% for MSCI Europe Enhanced Value versus +19.39% for MSCI Europe.
- 3 years (annualised): +19.22% for MSCI Europe Enhanced Value versus +14.51% for MSCI Europe.
- 5 years (annualised): +15.44% for MSCI Europe Enhanced Value versus +11.20% for MSCI Europe.
Over the long term (since December 1998), the index posts an annualised return of 7.47%, higher than that of its parent index (+5.28%). These figures illustrate the ability of the Value risk premium to generate outperformance over long cycles, despite slightly higher historical volatility (16.85% over 3 years).
Value ETFs linked to the index or to neighbouring indices:
- Amundi MSCI Europe Value Factor UCITS ETF - EUR (TER 0.23%/Assets under management €301.1m/Accumulating/Synthetic replication/Index MSCI Europe Enhanced Value TRN)
- iShares Edge MSCI Europe Value Factor UCITS ETF (TER 0.25%/Assets under management €2.318bn/Accumulating/Physical replication/Index MSCI Europe Enhanced Value Index)
- Xtrackers MSCI Europe Value UCITS ETF 1C (TER 0.15%/Assets under management €175.4m/Accumulating/Physical replication/Index MSCI Europe Daily Value EUR TR Net EUR)
- SPDR MSCI Europe Value UCITS ETF (TER 0.20%/Assets under management €67.5m/Accumulating/Physical replication/Index MSCI Europe Value Exposure Select Index)
