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Beginner’s guide to index | What is the GER40?

What is the GER40?

GER40, with full name of Deutscher Aktien Index, also known as DAX Index. It was founded on July 1, 1988.
The GER40 index is composed of the top 40 companies with the largest market capitalization and the most liquid stocks listed on the Frankfurt Stock Exchange, including German corporate magnates from automobiles, insurance, pharmaceuticals and other fields. The market value of GER40 accounts for about 80% of the market value of all listed companies in Germany. It is the vane of the German stock market and economy. It is also one of the three major stock indexes in Europe (the other are UK100 and FRA40).

Constituent stocks of GER40

Since the inception of the GER40 index, the number of GER40 constituents has always been 30 constituent stocks. However, since the third quarter of 2021, GER40 index has been expanded to 40 constituent stock companies, so the name of the GER30 has also been changed to GER40.

The GER40 index is a measure of the overall German economy. Therefore, these 40 multinational companies listed on the GER40 play a pivotal role in both of the German domestic and global economy. The constituent stocks of GER40 are mainly basic raw materials, industrial, consumer discretionary, automotive, and healthcare, such as: Adidas, Allianz, BMW ST, Deutsche, Merck, etc. Hence, its constituent stocks are large companies with long-term stability and good performance. That’s why most of the investors believe that GER40 is the vane of the German stock market and economy.

The management organization of GER40 is STOXX, a subsidiary of Deutsche Börse. When STOXX selects constituent stocks, they are mainly consider two main points: one is the market value of the company, and the other is the liquidity of the company’s stock.

STOXX conducts quarterly reviews of GER40 constituents in March, June, September, and December of each year. Companies must remain within the top 45 of the Frankfurt Stock Exchange in terms of market capitalization and liquidity, otherwise the non-constituent stocks with the highest market capitalization and liquidity will replace them.

The GER40 contains Germany’s largest and most well-known blue-chip stocks. Hence, GER40 index is compiled in a way that is equivalent to the UK100, S&P 500 and Dow Jones indices.
The GER40 uses the market capitalization-weighted method. In order to prevent the constituent stocks with large market capitalization from having too much influence on the index, the GER40 index stipulates that each constituent stock can only account for a maximum of 10% of the index weight regardless of its market value.

How to trade GER40 on HXFX?

1. First, click here to register an HXFX account for free.
2. Next, download the APP and log in to complete the real-name authentication.
3. Contact customer service to receive your exclusive free trial bonus.
4. Click “Quote”, select “GER40” and click “Trade”. After the quotation page is displayed, you can click “Sell” or “Buy” to trade the index according to the trends.

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1. Leverage system
Investing a small amount of money will bring greater benefits, but may also bring greater risk of loss.
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In the foreign exchange market, investors could exchange foreign currency at any time, even complete their transactions in a short time.

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Disclaimer: Information above can only be use for references and doesn’t represent our platform’s opinions.

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