What Is the DAX Stock Index?
DAX is a stock index that represents 30 of the largest and most liquid German companies that trade on the Frankfurt Exchange. The prices used to calculate the DAX Index come through Xetra, an electronic trading system. A free-float methodology is used to calculate the index weightings along with a measure of the average trading volume.
The DAX was created in 1988 with a base index value of 1,000. DAX member companies represent roughly 75% of the aggregate market capitalization that trades on the Frankfurt Exchange.
- The DAX is a German blue chip stock market index that tracks the performance of the 30 largest companies trading on the Frankfurt Stock Exchange.
- Xetra is an electronic trading system that provides the prices used to calculate the DAX index.
- The DAX is a prominent benchmark for German and European stocks, listing major companies by liquidity and market capitalization.
- A few of the globally recognized companies on the DAX include Volkswagen, Bayer, BMW, and Adidas.
Understanding the DAX Stock Index
In a different twist from most indices, the DAX is updated with futures prices for the next day, even after the main stock exchange has closed. Changes are made on regular review dates, but index members can be removed if they no longer rank in the top 45 largest companies, or added if they break the top 25.
The vast majority of all shares on the Frankfurt Exchange now trade on the all-electronic Xetra system, with a near-95% adoption rate for the stocks of the 30 DAX members.
DAX Member Companies
As of January 15, 2020, the DAX companies included (in alphabetical order):
- Covestro AG (1COV:GR)
- adidas AG (ADS:GR)
- Allianz SE (ALV:GR)
- BASF SE (BAS:GR)
- Bayer AG (BAYN:GR)
- Beiersdorf AG (BEI:GR)
- Bayerische Motoren Werke AG (BMW:GR)
- Continental AG (CON:GR)
- Daimler AG (DAI:GR)
- Deutsche Boerse AG (DB1:GR)
- Deutsche Bank AG (DBK:GR)
- Deutsche Post AG (DPW:GR)
- Deutsche Telekom AG (DTE:GR)
- E.ON SE (EOAN:GR)
- Fresenius Medical Care AG & CO KGaA (FME.GR)
- Fresenius SE &Co KGaA (FRE:GR)
- HeidelbergCement AG (HEI:GR)
- Henkel AG & Co KGaA (HEN3:GR)
- Infineon Technologies AG (IFX:GR)
- Deutsche Lufthansa AG (LHA:GR)
- Linde PLC (LIN:GR)
- Merck KGaA (MRK:GR)
- MTU Aero Engines AG (MTX:GR)
- Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (MUV2:GR)
- RWE AG (RWE:GR)
- SAP SE (SAP:GR)
- Siemens AG (SIE:GR)
- Vonovia SE (VNA:GR)
- Volkswagen AG (VOW3:GR)
- Wirecard AG (WDI:GR)
Other major trading exchanges worldwide include:
- The New York Stock Exchange (NYSE)
- The Nasdaq
- The London Stock Exchange (LSE)
- The Tokyo Stock Exchange (TSE)
As with the DAX, all exchanges have specific listing requirements for those who wish to offer their securities for trading. In general, these include regular financial reports, audited earning reports, and minimum capital requirements. For example, the NYSE has a key listing requirement that stipulates a company must be profitable, have at least 400 shareholders who own more than 100 shares of stock at a minimum share price of $4, and a minimum of 1.1 million publicly traded shares. For worldwide market trading, the requirements companies must meet are stricter.