The German DAX Index 30, the English name is “DAX 30 Index”, often referred to as DAX in news reports, was founded by Deutsche Börse in 1988. The index is composed of the top 30 stocks of the largest and most liquid companies listed on the Frankfurt Stock Exchange. It includes German corporate giants from various fields such as automobiles, insurance, and pharmaceuticals. The market value of DAX accounts for about 80% of the market value of all listed companies in Germany. It is a weather vane for the German stock market and economy, and one of the most watched stock price indices in the Eurozone.

The German DAX Index 30 is a market capitalization weighted index. In order to prevent large market capitalization constituent stocks from having too much influence on it, each constituent stock of the index can only account for a maximum of 10% of the weight, regardless of the market capitalization. Since August 2019, the management authority of the index has been transferred to STOXX, a subsidiary of Deutsche Börse. The stock index managed by STOXX also includes the STOXX Europe 50. When choosing constituent stocks, Stoker will consider two factors: one is the company’s market value, and the other is the liquidity of the company’s stocks. In March, June, September and December each year, Stoke will conduct quarterly audits on the constituent stocks of DAX. To keep the number of constituent stocks, the company’s market value and stock liquidity must be kept within 45. Otherwise it will be replaced by non-component stocks with the highest market capitalization and liquidity.

It is worth noting that, unlike many stock price indexes (such as the US Nasdaq Index 100 ), the German DAX Index 30 calculates the rate of return of the constituent stocks (that is, the current market value divided by the market value when the stock index is added), not the market value In itself, the index is therefore designed to reflect changes in the overall rate of return of the German stock market, not just changes in market value.

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