DE40 - Indices

The Origin of DE30: The DAX, also known as the Deutscher Aktien Index or DE30, was created in 1988 with a starting index level of 1,163 points from the need for a complex stock index for Germany, a task by a Börsen-Zeitung newspaper editor - Frank Mella. His compelling ideas quickly moved from an idealistic project to a functioning index.

Expansion of the DE30: The DAX was initially composed of 30 companies, which led to the name DAX30 or DE30. However, recognising the need for a broader representation of Germany's vibrant economy, the index expanded to 40 companies as of September 20, 2021. This change makes it a more comprehensive barometer of Germany's economic activity.

Significance of DE30: The DE30 tracks 40 of the largest and most liquid German companies that trade on the Frankfurt Exchange. It is considered as an accurate gauge of Germany's economic health and is used as an indicator of trends in Germany's economy. Its influence extends beyond Germany, making it a metric for global economic analysis.

Trading System behind DE30: The prices to calculate the DAX Index come through Xetra, an electronic trading system. This advanced system ensures that the prices used in the index calculation are accurate, timely, and reflective of the current market conditions. The system plays a major role in maintaining the integrity and reliability of the index.

DE30 as Germany’s economic health indicator: The DE30 index represents diverse companies from various industries, providing a comprehensive view of Germany's economy. For instance, Bayer AG, a pharmaceutical and health company founded in 1863, is part of this index, enhancing its resilience across economic cycles.

DE30 and Germany's Economic Miracle: The success of the companies listed in the DE30 has greatly contributed to the so-called "German economic miracle," or Wirtschaftswunder. This term describes Germany's impressive economic rebirth following World War II, a phenomenon closely linked with the performances of the companies in the index.

DE30's Strong Performance: Between March 2016 and March 2021, the DE30 showed significant growth, demonstrating the strength of the German economy and its resilience during economic downturns. Despite various market corrections, the overall trend is higher highs and higher lows, making it a benchmark of robust economic growth.

DE30's Historic Aid Package: In May 2020, during the COVID-19 pandemic, the German parliament passed a massive aid package to bolster the German economy. This move, unprecedented in scale and swift in execution, had a positive impact on the DE30 and is a testament to Germany's proactive and robust response to economic crises.

DE30 Outperforms other European Indices: Compared to other European indices such as the UK100, CAC 40, EuroStoxx 50 PR, and the IBEX 35, the DE30 was the strongest performer through the pandemic year, March 2020 to March 2021. This shows the DE30's relative strength and resilience in volatile times.

80% Market Capitalisation: The DE30 represents approximately 80% of the market capitalisation of Germany's listed stock companies, underscoring its comprehensive coverage of Germany's corporate sector and its significance as a barometer of economic health.