What is DAX 30?
DAX is the an European equity index which represent the 30 largest publicly listed German companies on Frankfurt Stock Exchange. It is the European equivalent of the Dow Jones Industrial index or the ASX 20 Index.
Due to inclusion of only the 30 largest companies in Germany it is a highly concentrated mega capitalisation index where the average market cap of the company is more than EUR 30 billion.
The largest company in the index, SAP is a technology company and similar to the experience in the US and HK reflects the outperformance of the sector vs the broader economy.
DAX Index Performance
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Chart above shows the return of the DAX 30 index performance year to date and compare the DAX with the other major equity indicies around the globe.
DAX Index Chart
DAX live quote chart above replicate the performance of the DAX index.
DAX 30 Companies
Companies in the DAX 30 index are spread out across multitude of sectors ranging from healthcare, financials to industrial automotives. It consists some of the most well known global brands such as BMW, Alliance, Siemens and Merck.
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The list rank companies based on market capitalisation largest to smallest.
Sector Exposure
It is well known the Australian equity market is heavily concentrated on miners and financials. The construction of this index is more even where no one sector make up more than 20% of the index.
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Consumer Discretionary is the largest sector, followed by financials then healthcare and industrials.
The sector diversification of the Dax is reflective of the broader German economy. A number of companies also represent the export powerhouse of the Germany. Their earnings are also a function movements in the Euro against the US dollar.
DAX Investing
There are 2 ways investors can include Dax in the portfolio. Short term traders can use the Dax futures while long term investors can use listed Exchange Traded Funds which tracks the performance of the index.
As the futures contract and ETFs are listed in Europe the total investor return is also dependent on the changes in the AUD/EUR exchange rate.
DAX trading hours are the same as market trading hours. The future can be traded 24 hours a day while ETFs are available for trading when the European stock market are open.
Dax Index Fund
No ASX listed ETF track the index however for those that have access to European markets. Lyxor’s Fund has the most liquid index fund that replicate the returns of the index.
For Australian investors which can only invest in funds listed on the ASX there are 2 European wide ETF which there is a overlap with the Dax.