What Is the DAX Index? Top 40 German Companies Explained
By Markets & Investing DeskUpdated Nov 10, 2026
Definition
The DAX is Germany's benchmark stock index, tracking 40 of the largest companies on the Frankfurt Stock Exchange by free-float market capitalization, with dividends reinvested.
Key takeaways
- The DAX covers 40 German blue-chip companies; it held 30 until the 2021 expansion, which is why "DAX 30" still appears in older sources.
- Prices come from Xetra, and weights use free-float market capitalization, so only shares available for public trading count.
- Its members represent roughly 80% of the aggregate market capitalization traded on the Frankfurt exchange.
- The headline DAX reinvests dividends, so its level is not directly comparable with price indices such as the S&P 500 or the Dow.
- You cannot buy the index itself, but ETFs, mutual funds, futures and CFDs track it.
The DAX index (Deutscher Aktienindex, or “German stock index”) is the benchmark stock market index of Germany. It tracks the 40 largest and most actively traded German companies listed on the Frankfurt Stock Exchange, weighted by free-float market capitalization and priced from Deutsche Börse’s Xetra electronic trading system. The DAX is a performance index, which means it assumes dividends are reinvested. That one feature separates it from most headline indices quoted around the world.
How the DAX Index Works
The DAX was launched in 1988 with a base value of 1,000 points, set at the end of 1987. Deutsche Börse owns it, and its index business, STOXX, administers it. The index is recalculated continuously during Xetra trading hours (9:00 to 17:30 Central European Time) using the latest transaction prices of its members. Brokers and CFD providers often list it under tickers such as GER40 or DE40.
Membership rules
Membership is reviewed on a regular schedule, typically quarterly. Companies are ranked mainly by free-float market capitalization, with trading volume used to confirm liquidity. Fast-entry and fast-exit rules allow a company to be added or removed between reviews if its ranking moves sharply.
The 2021 reform did more than raise the count from 30 to 40. It followed the collapse of Wirecard, a DAX member that became insolvent in 2020 after an accounting scandal. New candidates must now show positive EBITDA in their two most recent fiscal years, and members must publish audited financial reports on time. The expansion also pulled in companies from the second-tier MDAX, broadening sector coverage.
Members span autos (Volkswagen, BMW, Mercedes-Benz), insurance (Allianz, Munich Re), software (SAP), industrials (Siemens, Airbus, Rheinmetall), chemicals and pharma (BASF, Bayer, Merck KGaA) and consumer brands (Adidas, Beiersdorf). Composition changes over time, so a list is only accurate as of its date.
Calculating the DAX
In simplified form, the DAX follows a Laspeyres-type formula:
DAX = Base value × Σ (current price × free-float shares × correction factor) ÷ Σ (base price × base shares)
The correction factor adjusts for dividends, stock splits and capital changes so that these events do not create artificial jumps or drops in the index.
Hypothetical example (three-stock index, base value 1,000):
| Stock | Base price | Free-float shares | Base value | New price | New value |
|---|---|---|---|---|---|
| A | €50 | 100 | €5,000 | €55 | €5,500 |
| B | €20 | 200 | €4,000 | €20 | €4,000 |
| C | €10 | 100 | €1,000 | €9 | €900 |
| Total | €10,000 | €10,400 |
Index level = 1,000 × 10,400 ÷ 10,000 = 1,040, a 4% gain. Stock A rose 10% and added €500 of value, while Stock C fell 10% and subtracted only €100, because A carries five times C’s free-float weight. Changes in larger companies move the index more. This example assumes no dividends or corporate actions during the period.
Performance Index vs. Price Index
The headline DAX is a performance (total return) index. When a member pays a dividend, its share price drops by roughly the dividend amount, but the correction factor treats that cash as reinvested, so the index does not fall. A separate DAX price index (often called DAX Kursindex) excludes dividends and moves lower on ex-dividend dates.
This matters when you compare levels or long-term charts. The S&P 500, the Dow Jones Industrial Average and the FTSE 100 are usually quoted as price indices. Comparing their price returns with the DAX’s total return overstates the DAX’s relative performance by roughly the dividend yield, compounded over the years.
What the DAX Tells You
Analysts treat the DAX as a barometer of German corporate health and, more loosely, of the German economy. A rising index means investors are valuing Germany’s largest listed companies more highly. A falling index means the opposite. Because many members are global exporters, the DAX also responds to world demand, currency moves and trade conditions, not only to domestic data.
Its history mirrors Germany’s postwar industrial strength, the export-led growth often linked to the Wirtschaftswunder (“economic miracle”). Today it serves as the reference benchmark for German equity funds and as the underlying for some of Europe’s most actively traded index futures and options.
DAX vs. Other Major Indices
| Index | Constituents | Exchange | Weighting |
|---|---|---|---|
| DAX | 40 | Frankfurt (Xetra) | Free-float market cap; total return |
| S&P 500 | 500 | NYSE and Nasdaq | Float-adjusted market cap; price |
| Dow Jones Industrial Average | 30 | NYSE and Nasdaq | Price weighted |
| FTSE 100 | 100 | London Stock Exchange | Free-float market cap; price |
The DAX resembles the Dow in being a small blue-chip index, but the Dow Jones Industrial Average weights companies by share price, while the DAX weights by free-float value. In method it sits closer to the S&P 500, with far fewer members and a heavier tilt toward industrials, autos and financials.
How to Invest in the DAX
An index is a calculation, so you buy exposure through products that track it:
- ETFs: funds that replicate the DAX, either by holding its members at index weights or through swap-based replication. Check whether a fund is accumulating or distributing, since that affects how its returns line up with the total-return index.
- Mutual funds: actively or passively managed German equity funds that use the DAX as a benchmark.
- Futures and options: exchange-traded DAX derivatives on Eurex, used for hedging and leveraged positions.
- CFDs: broker contracts on “GER40”-type instruments. These are leveraged products, often carry overnight financing charges and are restricted for retail clients in some jurisdictions.
For investors outside the eurozone, returns also depend on the euro exchange rate. A DAX gain can shrink or turn negative once converted into dollars or another home currency, unless the product is currency hedged.
Limitations of the DAX Index
- Narrow coverage: 40 stocks leave out Germany’s many mid-sized and family-owned firms (the Mittelstand), which are partly covered by the MDAX and SDAX.
- Global, not purely domestic: many members earn most of their revenue abroad, so the index is an imperfect reading of the German economy alone.
- Concentration: market-cap weighting lets a few large companies dominate daily moves, as the example above shows.
- Comparability: the total-return convention distorts side-by-side comparisons with price indices unless you match like with like.
- Survivorship: weak companies drop out and stronger ones replace them, so the index’s history is not the record of a fixed group of companies.
FAQs
Is Merck in the DAX the same as the U.S. Merck?
No. Merck KGaA, the DAX member based in Darmstadt, is a separate company from Merck & Co. of the United States, which trades in the U.S. and operates as MSD outside North America. The two share historical roots but have been independent since after World War I.
What are the MDAX, SDAX and TecDAX?
They are DAX family indices. The MDAX covers 50 mid-cap companies ranked below the DAX, the SDAX covers 70 smaller companies below the MDAX, and the TecDAX tracks the 30 largest technology companies, which can also sit in the DAX or MDAX.
The Bottom Line
Investors comparing German stocks with other markets, or buying products that track them, need to know that the headline DAX reinvests dividends while the S&P 500, Dow and FTSE 100 are usually quoted as price indices. Exposure comes through ETFs, mutual funds, futures and CFDs, so check whether a fund accumulates or distributes. Investors outside the eurozone should also account for euro exchange rates unless the product is currency hedged.
