The DAX Performance Index, commonly referred to as simply the DAX, is a stock market index that tracks the performance of the 30 largest and most actively traded companies listed on the Frankfurt Stock Exchange. The index is calculated by Deutsche Börse AG and is considered one of the most important stock market indices in Europe and the world.
The DAX was launched on July 1, 1988, with a base value of 1,000. It is a capitalization-weighted index, meaning that the market capitalization of each constituent stock determines its weight in the index. The DAX is calculated in real-time during the trading hours of the Frankfurt Stock Exchange, which is from 9:00 am to 5:30 pm Central European Time (CET).
The DAX is often used as a barometer of the overall performance of the German economy, as it represents around 80% of the total market capitalization of the Frankfurt Stock Exchange. It is also used as a benchmark by investors looking to invest in German equities or gain exposure to the European stock market.
The DAX is divided into 11 sectors, with each sector comprising of 2 to 4 stocks. The sectors and their respective weightings in the index as of March 2023 are as follows:
- Healthcare (12.3%)
- Consumer Discretionary (12.1%)
- Industrials (11.8%)
- Information Technology (11.7%)
- Financials (11.4%)
- Materials (9.6%)
- Consumer Staples (8.8%)
- Energy (6.1%)
- Telecommunications (4.9%)
- Utilities (3.2%)
- Real Estate (2.1%)
The healthcare sector is the largest sector in the index, with a weighting of over 12%. This reflects the significant role that Germany’s pharmaceutical and healthcare companies play in the country’s economy. The consumer discretionary sector is the second-largest, with a weighting of around 12%, followed by the industrials and information technology sectors.
The financial sector has been one of the worst-performing sectors in recent years, due in part to low-interest rates and regulatory pressures. The energy sector has also been underperforming, due in part to the shift away from fossil fuels towards renewable energy sources.
Investors looking to gain exposure to the DAX have several options, including investing in index-tracking funds, exchange-traded funds (ETFs), or mutual funds. However, it’s worth noting that investing in the German stock market can be challenging due to currency risks and regulatory issues. As such, investors should conduct thorough research and consult with a financial advisor before investing in the DAX or any other German equities.