Dax, Germany’s flagship blue-chip equity index, tracks 40 of the largest, most liquid companies listed on the Frankfurt Stock Exchange—thereby providing a real-time pulse of Europe’s biggest economy. Consequently, the Dax serves as both a macro barometer and a trading workhorse for global investors.
1. Quick Facts
Item
April 2025 Value
Transition Note
Index Level
18 960
First and foremost, an all-time high.
Market Cap
€1.8 trillion
Meanwhile, depth rivals regional peers.
Dividend Yield
2.5 %
Thus, income beats Bund coupons.
Currency
Euro
Accordingly, FX risk matters.
Launch Year
1988 (back-history to 1959)
Finally, a long data set aids research.
2. How the Dax Is Built
Rule
Detail
Transition Note
Constituents
Top 40 shares by free-float market value and order-book turnover
To begin with, size and liquidity dominate.
Weighting
Free-float market-cap, 10 % cap per stock
Therefore, single-name risk is tempered.
Review Schedule
Quarterly (Mar, Jun, Sep, Dec)
Moreover, changes stay timely.
Liquidity Test
Must rank in top 65 German stocks by turnover or market value
Consequently, thinly-traded firms are filtered out.
Since September 2021, the Dax expanded from 30 to 40 names and adopted new profitability screens after the Wirecard scandal—thereby boosting quality.
3. Sector Breakdown (April 2025)
Sector
Weight
Transition Note
Industrials
21 %
Chiefly, Germany’s export engine.
Consumer Discretionary
18 %
Meanwhile, autos drive demand.
Health Care
15 %
Additionally, ageing demographics help.
Information Technology
14 %
Notably, chip capacity is expanding.
Materials
12 %
Thus, cyclicals remain relevant.
Financials
10 %
Furthermore, rising rates aid net interest margins.
Others
10 %
Collectively, energy and real estate round out exposure.
4. Recent Performance
Period
Total Return (EUR)
Main Driver
Transition Note
2022
–12.3 %
Energy shock, rate hikes
Initially, macro stress hurt returns.
2023
+20.0 %
China reopening, PMI rebound
Subsequently, momentum surged.
2024
+10.4 %
Euro weakness, export boom
Moreover, FX tailwinds persisted.
YTD 2025
+4.8 %
AI hardware and autos strength
So far, sector rotation favours tech.
Three-year volatility averages 17 %, roughly in line with other large-cap European indices; therefore, the Dax remains a core risk gauge.
5. Why Investors Track the Dax
Economic Barometer. Heavyweights BASF, Siemens, and SAP mirror global trade and tech demand; accordingly, earnings updates move sentiment.
Dividend Income. German firms distribute ~45 % of earnings, thereby giving the Dax a steady yield premium over Bunds.
Derivatives Liquidity. Eurex Dax futures and options trade over €4 billion notional daily; thus, hedging is efficient.
ETF Access. Funds like EWG (US) andDAXEX (EU) offer low-cost exposure; consequently, retail participation is high.
6. Strengths & Caveats
Strengths
Caveats
Free-float caps curb single-stock dominance.
However, export bias ties returns to global cycle and euro FX swings.
Quarterly reviews keep the basket current.
Domestic mid-caps are excluded—tracked by MDAX instead.
Profitability rule filters weaker issuers.
Nevertheless, 40 names give less diversification than MSCI Germany (~60).
7. Themes to Watch
Green Transition. Industrials winning hydrogen and battery-storage contracts could lift index EPS by 8 % over two years.
AI & Chips. Infineon’s expansion may push IT weight above 16 %, thereby increasing the Dax tech tilt.
ECB Rate Cuts. A 50 bp easing by March 2026 would boost domestic demand sectors—notably, consumer and real estate.
Key Takeaways
The Dax condenses Germany’s market leaders into a single, tradable index with deep futures and ETF liquidity. As of April 2025, weighting skews toward industrials, autos, and health care—therefore offering both export and tech leverage. Ultimately, investors rely on the Dax as a macro gauge, income source, and tactical trading vehicle, yet they must recognise its sensitivity to global growth and currency moves.
