TRADE THE DAX 40 – BIGGEST GERMAN COMPANIES
The DAX is a German blue-chip stock market index that tracks the performance of the 40 largest companies trading on the Frankfurt Stock Exchange. Trading the DAX will give you access to globally recognized companies including Volkswagen, Bayer, BMW, and Adidas.
What is the DAX 40?
The DAX 40 is the main index within the German Stock Index. The DAX is traded on the Frankfurt Stock Exchange of Deutsche Bank Group, ranking 10th largest in the world, and the third strongest in terms of total market capitilisation.
This indicator reflects the overall performance of German equities and the overall economic situation in the country, as well as investor sentiment towards these companies.
The DAX is the weighted market, such as the CAC 40, and the DAX measures the performance of the 40 of the largest publicly-traded companies in Germany. These stocks account for 80% of the total market value in the German market.
The index was historically comprised of 30 companies, then called the DAX 30, but was expanded to 40, hence the name change, as of September 2021.
New additions to the index were Airbus, Zalando, Siemens Healthineers, HelloFresh, Symrise, Sartorius, Porsche Automobile Holding, Brenntag, Puma and Qiagen.
Biggest German Brands
The DAX index is considered by many analysts to be a good gauge of Germany’s economic health. The companies listed have a huge influence on the German and global economy.
From automotive to technology, the companies in the DAX comprise a wide range of industries. Adidas AG is a global leader in athletic footwear and apparel. Volkswagen AG is the world’s second-biggest carmaker.
How the DAX 40 works
The DAX 40 uses a “free-float methodology”, which means that only readily available shares are taken into account and excludes shares that are untradable (i.e owned by the German government). The prices used to calculate the index are derived electronic trading system Xetra.
As with the DOW Jones, the DAX Index is also calculated based on market cap. Companies with higher market caps have more influence on their value although companies featured in the DAX can have a maximum weight of 10%.