The DAX 40 (GER 40) is not only Germany’s most important stock index, but it is also extensively followed across the world. When experts discuss the performance of stock markets in Continental Europe, the German index is almost always the first to be discussed.
Before we get into how to trade indexes like the DAX, let’s take a look at what it symbolizes and which firms are included in it.
What exactly is the DAX 40 (GER 40)?
DAX 40 (GER 40) (Deutscher Aktienindex) measures the performance of the top 40 German corporations listed on the Frankfurt Stock Exchange. The components are chosen on the basis of their free-float market capitalization. It is Germany’s most important stock index, but it is also closely monitored by traders and investors worldwide, owing to Germany’s prominent importance in the global economy.
The index was established on July 1, 1988, and it began trading at 1163 points. It is frequently seen as a crucial indication of the status of the German economy because it includes some of the country’s most prominent corporations. The DAX is Germany’s equivalent to the Dow Jones in the US.
The DAX was known as the “DAX 30” for the duration of its existence since it consisted of the 30 largest businesses listed on the Frankfurt Stock Exchange.
The transition to 40 components took effect in September 2021, and it featured tighter index listing standards as well as new de-listing regulations. This was in response to the Wirecard debacle.
What is the formula for calculating ?
Companies must meet some basic requirements in order to be included in the DAX. They must be listed on the Frankfurt Stock Exchange, have a free float of at least 10%, have a legal or operational headquarters in Germany, and punctually publish quarterly/annual reports.
The elements are chosen based on free-float market capitalization, which is evaluated quarterly. A single firm cannot have more than a 10% weighting in the index.
What are the trading hours for the DAX?
The DAX market is open from 9 a.m. to 5:30 p.m. (Central European Time). Out-of-hours trading takes place from 5:30 p.m. to 10:00 p.m. and from 8:00 a.m. to 9:00 a.m.
The Dax Futures contract is traded on the EUREX platform from 01:10 to 22:00. (Central European Time). The DAX30.fs product is available for trading on the MT4 platform from 02:15 to 22:59. (MT4 server time).
The Cash CFD – GER30 – is available for trading between 18:00 Sunday and 16:59 Friday (New York Time), with a daily trading break between 16:59 and 18:00. (New York Time).
What industries are represented in the DAX?
Chemicals is the largest sector, accounting for about 16 percent of the index, as seen in the graphic below. This is closely followed by the Industrial sector, which accounts for 15% of the total. The automobile industry, led by the two heavyweights Volkswagen and Daimler, is followed by Pharma & Healthcare, which together account for nearly 20% of the index.
The DAX 40 index price
The DAX recently set a new all-time high of 16,290 points. The 52-week low is at 13,009 points.
How do to trade the DAX 40?
Contracts for Difference (CFDs) are one way to trade the DAX in a cost-effective and efficient manner. Brokers often provide a CFD based on the cash index (GER30) as well as a CFD based on the underlying futures contract (DAX30.fs).
When you trade indices online using CFDs, you may speculate on the underlying instrument’s (The DAX) direction without owning it or any of its members. You will be able to travel both long and short with the use of leverage.
This is especially important during a recession. Most investors want to avoid portfolio reshuffling since the fees may quickly build up and it is extremely difficult to predict the market accurately. As a result, instead of selling a substantial portion of your portfolio when a downturn is expected, you might utilize CFDs to bet on declining prices.
The cash CFD (GER30) or futures CFD (DAX30.fs) will be better suited for you depending on your trading style. If you just want to hold positions for a limited amount of time, the GER30 may be preferable due to its modest spreads. However, if you are a long-term trader, you may choose the DAX30.fs because there are no swap charges.
What is the best way to invest in the DAX 40?
The most common way to invest in the German index is through Exchange Traded Funds (ETFs). It is less expensive than purchasing individual shares, and it is rebalanced on a regular basis.
The following are the major DAX ETFs:
- iShares Core DAX UCITS ETF
- Xtrackers DAX UCITS ETF
- Deka DAX UCITS ETF
The following ETFs have the lowest TER (total cost ratio):
- Lyxor Core DAX
- XTrackers UCITS ETF
- Xtraders DAX UCITS ETF Income
Most DAX ETFs are identical and essentially merely mirror the index’s performance. When evaluating various ETFs, investors often consider the total expense ratio (TER) – that is, how much it will cost to own the ETF – as well as the amount of money under management and the domicile of the ETF.
| Market hours (CET) |
GER30 (Cash CFD) 18:00 Sunday to 16:59 Friday (daily break 16:59 – 18:00) |
9 AM to 5:30 PM Out of Hours: 8 AM – 9 AM 5:30 PM – 10 PM |
| Initial capital required | 0.5% | 100% |
| Losses can exceed deposits | Yes | No |
| Timeframe | Short-term | Medium to long term |
What are the top ten DAX 40 (GER 40) companies?
The following are the top ten most valuable firms in terms of market capitalization:
- Linde
- SAP
- Siemens
- Volkswagen
- Merk
- Daimler
- Deutsche Telekom
- Allianz
- Airbus
- Siemens Healthineers
What causes the DAX 40 (GER 40) to rise?
The DAX 40 (GER 40) is moved by a several factors, the most important of which are given below:
Economic data –German economic statistics will have an impact on the domestic stock market. Depending on the nature of the data, some firms will be impacted more than others, while others would be impacted less or not at all. Rising interest rates, for example, would have a greater impact on financial services firms than on others.
Earnings – Quarterly and yearly results, predictions, and business news may all have an impact on a company’s share price, and hence the value of the DAX. Given the importance of the DAX’s top ten firms, investors pay close attention to their results and projections. The table above can help you determine which firms are most likely to affect the DAX – the higher the weighting of the constituent, the greater the influence a rapid change in its share price might have on the index.
Currency fluctuations – Trade is very important in Germany. The country is the third largest exporter and third largest importer in the globe. As a result, the value of the Euro has the potential to have a major influence on the DAX. A rising Euro would be terrible news for exporters, while a significant depreciation would make life more difficult for imports.
What is the average return?
The table below examines the DAX’s net return. The 5-year annualised return was 7.9 percent, with a 30-day annualised volatility of 16.8 percent.
What does the performance tell us?
Historically, the DAX has lagged behind its counterparts in the United States. The index was affected worse in March 2020, when the epidemic began to spiral out of control, and recuperation was also slower.
While there are several explanations for this, one one is the index’s absence of technology businesses. The outperformance of key technology firms such as Amazon, Apple, and Google lifted US markets. Meanwhile, a quick glance at the DAX components reveals a slew of blue-chip firms.
Despite this, the DAX has done well over the last decade, and it is expected to set a new high in November 2021.
The DAX 40 (GER 40) has the following advantages:
- It is often regarded as a barometer of the health of the German economy.
- Comprised of major, well-established corporations with extremely liquid shares.
- The index is well-diversified, with no single sector dominating the index significantly.
The DAX 40 (GER 40)‘s drawbacks are as follows:
- The index is predominantly made up of blue-chip stocks, which account for a sizable portion of the index’s weight. The DAX may not be ideal for investors seeking exposure to German technology firms.
- The German stock market is more concentrated than the American market, and changes in the DAX components occur less regularly than in the S&P 500 or NASDAQ 100, for example.
List of DAX 40 (GER 40) companies
| Ticker | Company Name |
| ADS | ADIDAS AG |
| AIR | AIRBUS SE |
| ALV | ALLIANZ SE |
| BAS | BASF SE |
| BMW | BAYERISCHE MOTOREN WERKE AG |
| BAYN | BAYER AG |
| BEI | BEIERSDORF AG |
| BNR | BRENNTAG SE |
| CON | CONTINENTAL AG |
| 1COV | COVESTRO AG |
| DAI | DAIMLER AG |
| DHER | DELIVERY HERO SE |
| DBK | DEUTSCHE BANK AG |
| DB1 | DEUTSCHE BOERSE |
| DPW | DEUTSCHE POST AG |
| DTE | DEUTSCHE TELEKOM AG |
| EOAN | E.ON SE |
| FME | Fresenius Medical Care AG & Co. KGaA |
| FRE | FRESENIUS SE |
| HEI | HEIDELBERGCEMENT AG |
| HFG | HELLOFRESH SE |
| HEN3 | HENKEL AG |
| IFX | INFINEON TECH AG |
| LIN | LINDE PLC |
| MRK | MERCK KGAA |
| MTX | MTU AERO ENGINES |
| MUV2 | MUENCH.RUECKVERS.VNA |
| PAH3 | PORSCHE AUTOM.HLDG |
| PUM | PUMA SE |
| QIA | QIAGEN NV |
| RWE | RWE AG |
| SAP | SAP SE |
| SRT3 | SARTORIUS AG |
| SIE | SIEMENS AG |
| ENR | SIEMENS ENERGY AG |
| SHL | SIEMENS HEALTH.AG |
| SY1 | SYMRISE AG |
| VOW3 | VOLKSWAGEN AG |
| VNA | VONOVIA SE |
| ZAL | ZALANDO SE |
If you have any question on DAX 40 please don’t hesitate to CONTACT MARMARA FX
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.58% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.