The Deutscher AktienindeX or the DAX 30 represents 30 of the most liquid and large, blue chip companies in Germany. These companies are also listed and traded on the Frankfurt Exchange.
Since it first emerged 30 years ago, DAX member companies have grown to represent as much as 75% of the aggregate market cap value on trades on the Frankfurt Exchange.
Prices listed on the DAX 30 index are based on the electronic trading system, Xetra. The actual calculations are also based on a free-float model which focuses on the index weightings and a measure of the average trading volume.
Unlike most indexes around the world, the DAX 30 is updated with futures prices for the following day, even if the primary stock exchange is closed.
Changes are also made on regularly scheduled review dates, however, members of the index can be added if they break the top 30 or removed if they don’t rank in the top 30 companies anymore.
Several companies listed on the DAX are also large multinationals who play a significant role in the global economy. This makes it important for investors to keep a close eye on global events that can potentially influence the market.
If you want to get a good idea of how both German and European markets are faring, you have to look at the most popular benchmark in the region, the DAX. The companies listed on the DAX 30 are mostly recognizable because of their presence in international markets.
Some of the companies listed are as follows:
Investors seeking to gain exposure to the DAX 30 can do so through various exchange-traded funds (ETFs). But this doesn’t mean that investors can’t invest in individual components on the index.
However, individual foreign investors will need to have a foreign or global brokerage account to engage in trading.
Some popular ETFs that help foreign investors enter German markets are as follows:
If you’re considering any of the ETFs listed above, you should also do your homework to understand how they weighted and the expense ratios that are directly related to the funds. This approach is important to ensure that it’s a right fit for your investment portfolio.
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