Netherlands Stock Market Valuations and Expected Future Returns

Updated at Sun, 26 Jan 2020 20:30:09 -0600
Country: Netherlands (updated daily) check out Global Overview for detailed methodology.

Ratio of total market cap over GDP: Maximum - 503%; Minimum - 48%; current - 113%
Expected future annual return: 7.6%

ETF Used for dividend yield: EWN (Yield=1.98%)
Market Index used: AEX index
Current Annual GDP: $838 billion US dollars or 756 in billions of national currency (GDP in Local Current Prices Annual Growth=2.05%)
Data since year 1992

Netherlands Historical GDP Growth

Historical GDP of Netherlands in billions of national currency. The GDP in local current prices has grown at the annual rate of 2.05% over the past 8 years. Please note this growth rate includes the effect of price inflation and it is NOT the real GDP growth rate. Current Annual GDP: $838 billion US dollars or 756 in billions of national currency.

Netherlands GDP (Billion, National Currency)

Historical Stock Market Cap

Historical total market of Netherlands in billions of national currency. This value is normalized using the data published by WorldBank. AEX index is used for the normalization. The index is composed of a maximum of 25 of the most actively traded securities trade on Euronext Amsterdam.

Netherlands Total Market Cap (Billion, National Currency)

Historical Ratio of Total Market Cap over GDP (%)

The current ratio of total market cap over GDP for Netherlands is 113%. The historical high was 503%; the historical low was 48%. If we assume that the ratio will reverse to the historical mean of 150% over the next 8 years, the contribution to expected annual return is 3.57%. This is the detailed historical chart of the ratio.

Netherlands Ratio of Total Market Cap over GDP (%)

Predicted and Actual Returns

From the equation presented on the U.S. market valuation page,

Investment Return (%) = Dividend Yield (%) + Business Growth (%) + (Re/Rb)(1/T)-1

We can compute the predicted and actual returns of the Netherlands stock market over a given time period, T. In the calculation, we set T to equal eight years, the approximate length of a full economic cycle. The calculated results are presented in the chart below. The green line indicates the expected, or predicted return if the market ratio trends near the average ratio of 150% over the next eight years.

The blue line indicates the actual, annualized return of the Netherlands stock market over eight years. We use “AEX index” to do the actual return calculation. We can see the calculations largely predicted the trend in the stock market as the blue line is closely parallel to the green line.

Predicted and Actual Returns of Netherlands


The stock market of Netherlands is expected to return 7.6% a year for the coming years. This is from the contribution of economic growth in local current prices: 2.05%, Dividend Yield: 1.98% and valuation reverse to the mean 3.57%.

This is the projected return of the stock market in Netherlands relative to other countries. Click on each bar in the chart to go to other countries:

You can go here to see what international stocks Gurus are buying.

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