The EURO STOXX 50® Corporate Bond index allows market participants to invest into investment grade debt issued by key Eurozone blue-chip companies. The carefully defined index methodology hereby pays special attention to finding the right tradeoff between tradability and diversification across issuers as well as industries.

This paper provides a short introduction into the underlying index methodology before discussing the resulting index characteristics. Special focus lies on risk and return characteristics of the EURO STOXX 50® Corporate Bond index on a stand-alone basis as well as in a multi-asset context.

The empirical analysis shows that the index is highly efficient in terms of return generated per unit of risk taken. Measured since the index’s base date in Dec 31, 2010, the return-risk ratio is about ten times that of the equity equivalent EURO STOXX 50®. The attractive risk-return profile of the EURO STOXX 50 Corporate Bond index as well as low correlations between equity and bonds issued by the underlying companies provides the grounds for cross-asset investments based on the EURO STOXX 50 Corporate Bond index and the EURO STOXX 50 index. Modelling various cross-asset allocations and investment horizons, we find that combinations of both indices offer investors the possibility to construct efficient portfolios according to their individual risk preferences.

Read: EURO STOXX 50 Corporate Bond Index – The Gateway To Cross-Asset Investments Into Eurozone Blue-Chips