DAX

This article is about the stock index. For other uses, see Dax.

DAX
Performance Index
ISIN	DE0008469008
WKN	846900
Symbol	DAX
RIC	.GDAXI
Bloomberg Code	DAX <Index>
Price Index
ISIN	DE0008467440
WKN	846744
Symbol	DAXK
RIC	.GDAXIP
Bloomberg Code	DAXK Index

The DAX (abbreviation for Deutscher Aktienindex) is the most important German stock index. It currently measures the performance of the 40 largest and most liquid companies listed on the German stock market by free-float market capitalization and represents approximately 80 percent of the market capitalization of all listed German companies.

All companies included in the DAX must be listed at least in the General Standard segment of the Frankfurt Stock Exchange. The index is based on trading data from the electronic trading system Xetra and is calculated every trading day from approximately 09:00 to 17:30. The DAX is a registered trademark of Deutsche Börse AG and is the leading index of the DAX index family.

History

The DAX was developed jointly by the working group of German stock exchanges, the Frankfurt Stock Exchange, and the Börsen-Zeitung newspaper. It was introduced on 1 July 1988 as a continuation of the Börsen-Zeitung index, whose history dates back to 1959. The index was set to a value of 1,000 points for 31 December 1987. Initially conceived as a complement to established German stock indices, the DAX has since surpassed other indices in recognition and is now widely regarded as the benchmark for the German equity market, both domestically and internationally.

Originally based on the 30 most significant listed companies, the DAX was expanded to 40 companies in September 2021.

Types and related indices

The DAX is published both as a performance index and a price index. In the performance index (symbol DAX), dividends of the listed companies are assumed to be reinvested; in the price index (symbol DAXK), dividends are not taken into account. Colloquially, “DAX” refers to the performance index. In other indices (e.g., the EURO STOXX 50), the unqualified name often refers to the price index.

In spring 1994, the DAX 100 was introduced to document the performance of the 100 most liquid stocks. With the launch of the MDAX in 1996, the DAX 100 comprised the 30 DAX companies and the 70 MDAX companies. After the MDAX expanded to 50 companies (and to 60 companies on 24 September 2018), the HDAX replaced the DAX 100. The CDAX, by contrast, covers all stocks traded in Frankfurt. Since 24 September 2018, the SDAX covers 70 smaller companies immediately following those in the MDAX.

As a strategy index, there is, for example, the ShortDAX. It moves inversely to the daily performance of the DAX, allowing investors who can only take long positions to profit from negative market moves. If the DAX falls by 5 percent on a given day, the ShortDAX rises by the same amount. Index providers can thus offer products that increase in value when the DAX declines, giving buyers opportunities to profit from negative market movements. Other industry or strategy indices include the DivDAX, which tracks high-dividend companies. One of the most important German indices is the TecDAX, which includes 30 of the largest technology companies.

The implied volatility of the DAX over the next 30 days is measured by the VDAX-NEW, a volatility index published by Deutsche Börse AG. Its predecessor, the VDAX, measures implied volatility over 45 days using a different methodology. Both indices are quoted on an annualized basis.

Eurex offers options (ODAX) and futures (FDAX) on the DAX.

Calculation

Since 21 June 1999, the DAX is based on prices from the Xetra electronic trading system. Its calculation begins each trading day at 09:06 CET/CEST. If no opening price is available for an individual stock at that time, the previous trading day’s closing price is used. The calculation continues until the Xetra closing auction, which begins at 17:30 and lasts five to fifteen minutes. Until 31 December 2005, the DAX was updated every 15 seconds; since 1 January 2006, it has been updated every second.

The DAX is calculated using a Laspeyres formula: stock prices of the selected companies are weighted by their market capitalization based on free float. Only freely tradable shares are included in the weighting. If a company has multiple share classes (e.g., common and preferred shares), the more liquid class is used. Special cases (such as exchangeable shares) are also taken into account.

Outside Xetra trading hours (before opening and after the closing auction), Deutsche Börse AG calculates the LDAX (also L-DAX, L/E-DAX) from 08:00 to 09:00 and from 17:30 to 20:00 based on prices at the Frankfurt Stock Exchange, which has longer trading hours. Additionally, from 08:00 to 09:00 and from 17:30 to 22:15, the XDAX (also X-DAX) is calculated based on DAX futures traded at Eurex.

Companies in the DAX

Selection criteria

Since September 2021, companies qualify for DAX inclusion based on a single criterion: free-float market capitalization. This change was partially prompted by the Wirecard scandal. The free-float market capitalization is determined annually in March and September using the volume-weighted average price (VWAP) over the last 20 trading days of the respective month. It serves as the sole selection criterion for DAX membership.

Adjustments to the DAX also occur quarterly based on the four preexisting rules, which now apply alongside the new market-cap criterion:

• Fast-Exit: A company already in the index falls below rank 61 in DAX market cap (or below rank 111 in MDAX, rank 181 in SDAX, or rank 46 in TecDAX) and is removed. A non-index company that reaches at least rank 47 in DAX (or rank 97 in MDAX, rank 167 in SDAX, rank 35 in TecDAX) will replace it.
• Fast-Entry: A non-index company that reaches at least rank 33 in DAX (or rank 83 in MDAX, rank 153 in SDAX, rank 25 in TecDAX) is added. An index company at rank 47 in DAX (rank 97 in MDAX, rank 167 in SDAX, rank 35 in TecDAX) is removed.
• Regular-Exit: A company falls below rank 53 in DAX (rank 103 in MDAX, rank 179 in SDAX, rank 41 in TecDAX) and is potentially removed if a non-index company at rank 47 (rank 97, rank 167, rank 35) can replace it.
• Regular-Entry: A non-index company reaches at least rank 40 in DAX (rank 90 in MDAX, rank 160 in SDAX, rank 30 in TecDAX) and can be added. An index company at rank 47 (rank 97, rank 167, rank 35) is removed.

Index weighting

DAX constituents are weighted by free-float market capitalization. Only freely tradable shares of each company are included; shares held by major shareholders (5 percent or more) and treasury shares are excluded. Since 2006, there has been a cap on any single stock’s weighting: until 2023, no single constituent could exceed 10 percent. After Linde AG left the DAX, the cap was raised to 15 percent in 2024. Because SAP shares exceeded the cap and Deutsche Börse wishes to prevent SAP from leaving the DAX, a DAX 2.0 without weighting caps is being considered. However, UCITS regulations currently limit mutual funds to a maximum 10 percent holding in any one equity, and ETFs are limited to 20 percent.

Free-float market capitalization changes constantly due to price movements and changes in free-float shares. Weightings are recalculated every second based on current prices. Changes to a company’s free-float share count are updated only at the quarterly review dates. As a result, a stock price may reflect a changed free float in real time, but the weighting adjustment is delayed until the next review. Following the 2008 Volkswagen short squeeze, Deutsche Börse introduced interim rules: a company can be removed if its weighting exceeds 10 percent and its 30-day volatility exceeds 250 percent.

External links

• DAX Index – factsheet and details on dax-indices.com
• DAX Indication on Deutsche Börse AG
• Leitfaden zu den Aktienindizes der Deutsche Börse AG (PDF, 1.5 MB)
• Deutsche Bundesbank: Reconstructed DAX since 1959 (monthly data)