Advertisement

Germany’s Dax 30 stock index turns 30

Germany’s benchmark stockmarket index, the Dax 30, has risen tenfold since it began life 30 years ago.

Germany's benchmark stockmarket index, the Dax 30, is celebrating its 30th birthday this year. The blue-chip index currently stands at around 12,500, which means it has risen tenfold over the last three decades. By contrast, the Dax's British counterpart, the FTSE 100, is up by a factor of four. Nonetheless, this isn't a fair comparison.

Advertisement - Article continues below

The Dax's return is "an illusion", says Christof Schrmann in WirtschaftsWoche. Unlike the FTSE 100, the Dax is a total return index. It measures the performance of its 30 constituent companies assuming that all dividends are reinvested. A price index such as the FTSE 100 only tracks price movements; it captures capital gains but not income.

Nor is the index a snapshot of the German economy. Many major developed markets' indices comprise big blue chips that make most of their sales abroad, but the Dax is particularly globally orientated.

The index's fortunes reflect Germany's reliance on exports. More than 80% of the Dax constituents' sales are made beyond Germany's borders. And the exports of goods and services amount to 47.2% of Germany's GDP, according to the World Bank. This makes the index a highly geared play on global growth and especially prone to volatility as trade tensions between the US, China and the EU continue to build. Concern over the slowdown in the eurozone economy will continue to buffet it, too.

Advertisement
Advertisement

Recommended

The British equity market is shrinking
Stockmarkets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019
There are lots of reasons to be bearish – but you should stick with the bulls
Stockmarkets

There are lots of reasons to be bearish – but you should stick with the bulls

There are plenty of reasons to be gloomy about the stockmarkets. But the trend remains up, says Dominic Frisby. And you don’t want to bet against the …
17 Jul 2019
Good news on jobs scares US stockmarkets
Economy

Good news on jobs scares US stockmarkets

June brought the best monthly US jobs growth of the year, but stockmarkets were not best pleased.
11 Jul 2019
What gold, bonds and tech stocks have in common
Stockmarkets

What gold, bonds and tech stocks have in common

"Risk off" or "safe haven" assets such as gold and government bonds have been doing well lately. But so have riskier tech stocks. That seems to defy c…
10 Jul 2020

Most Popular

An economics lesson from my barber
Inflation

An economics lesson from my barber

On reopening his shop after lockdown, Dominic Frisby’s barber doubled his prices. It’s all part of the post-Covid inflation process – and we’re going …
8 Jul 2020
Can Rishi Sunak save the economy with stamp duty cuts and half-price meal deals?
UK Economy

Can Rishi Sunak save the economy with stamp duty cuts and half-price meal deals?

John Stepek runs his eye over the chancellor's £30bn stimulus package and asks if it's enough to get the economy back on its feet after months of lock…
9 Jul 2020
A first-half home run for investment trusts
Sponsored

A first-half home run for investment trusts

The investment trust sector has seen some extraordinary performance in the first half of this year. Max King looks at what's behind it, and asks: is i…
7 Jul 2020