dax 40 index what to know about dax 30 to dax 40

DAX 40 index: What to know about the change from DAX 30

The DAX 30 is Germany’s flagship index, representing 30 of the country’s largest companies by market capitalisation. But following an announcement by the exchange operator Deutsche Boerse in 2020, it is set to become even larger when it switches to the DAX 40, incorporating ten of the largest companies from Germany’s MDAX listing. Here are the key points for traders to know about the change.

Why is the DAX 30 changing to the DAX 40?

The DAX 30 is changing to the DAX 40 in order to increase the quality of the DAX indices, provide a more comprehensive picture of Germany’s largest businesses, and align the DAX indices with international standards, the Deutsche Boerse has said.

The decision was made in conjunction with a set of further reforms to the German index, such as the toughening of corporate governance rules, following an accounting scandal at payment processing company and former DAX 30 constituent Wirecard.

When will the DAX 30 become the DAX 40?

The DAX 30 will become the DAX 40 in September 2021, according to Deutsche Boerse, but there is currently no specific date earmarked for the change.

What will change when the DAX 30 becomes the DAX 40?

When the DAX 30 becomes the DAX 40, the Deustche Boerse will admit ten more companies to the index, meaning a potential change in the weighting allocations and a broader range of sectors covered, as well as other regulatory provisions.

Index additions

Potential additions to the index include aerospace giant Airbus SE, e-commerce operator Zalando, and global reinsurance group Hannover Rueck SE, with other likely additions including property company LEG Immobilien and Siemens Energy.

More companies equals a potentially wider range of sectors and a revision to index weightings, meaning traders should understand how the new weighting and particular sector activity can impact the DAX 40 as a whole once the adjustments are implemented.

Selection criteria change

While previously the DAX 30 considered stock exchange turnover for its rankings, now index members will be considered for liquidity levels instead.

New members will have to demonstrate the usual market capitalisation credentials, but now they must prove their profitability over their two most recent annual financial statements. This has implications for companies similar to Delivery Hero, which replaced Wirecard in the DAX 30 despite having never recorded a profit. Under the new rules, Delivery Hero would not be eligible.

Companies must also comply with the recommendations of the German Corporate Governance Code, which involves having an existing audit committee on the supervisory board. For existing members of the index, a transitional period will mean compliance is delayed until September 2022.

Additional compliance requirements

The DAX indices will undergo another review, with two scheduled main reviews a year to replace the single annual review carried out in September. There will also be a requirement to publish timely quarterly statements and audited annual results, Deutsche Boerse unit Qontigo has revealed.

Impact on MDAX

The change will mean that the MDAX, the German index that covers companies of a lesser value, will lose around a third of its total market cap as it reduces the number of constituents to 50 from 60, leading some commentators to express concern over potential reduced liquidity for the smaller index.

How might the DAX 40 impact traders?

As mentioned, the expansion of the DAX 40 will mean more companies, more sectors, and the potential for revised weighting. This may mean giants such as software company SAP, which currently has the largest weighting in the index, may exert less influence over the DAX’s moves once the changes come in. However, some believe that since the additions will feature smaller-capitalised organisations that any change at the top of the index won’t be significant.

The potential increase in representation across industries could mean the wider DAX proves a better proxy for the German economy, as speculators are able to see more diversity of sector across one index rather than two. As constituent companies change positions within the index, there may be an increasing need for traders to revise their fundamental analysis and research sectors with which they were previously unfamiliar.

How to trade DAX 40 and other indices

You can trade the DAX 30 with us now, and the DAX 40 on its expansion, along with a wide range of other indices and stocks.

Simply follow these easy steps to get started.

Open an account, or log in if you’re already a customer
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% 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. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.