What Is the DAX 40 Index? Learn How to Invest in the DAX 40 Index

Admirals
10 Min read

As of 20 September 2021, Germany’s benchmark index, the DAX 30, admitted ten new stocks to its ranks and consequently became the DAX 40 Index.

In this article, we will tell you everything you need to know about the new DAX 40, including the new DAX index constituents.

Furthermore, we will demonstrate the different ways you can start trading the DAX 40 with Admirals and how to get one of the industry’s most competitive spreadwhen trading the index through an Admirals account.

It is also notable to mention, Admirals (Admiral Markets/The Admiral Markets Groups AS) is a licensed partner of the DAX® 40. We are an official license holder of Deutsche Börse AG, the license holder of the DAX®. This allows us to offer the DAX® 40 CFD to our clients registered with Admirals, which is unique for a global CFD registered broker.

* As of 24 September 2022, the Apple App store has removed both MT4 and MT5 from their app catalogue; please be aware that you can still access these tools via the Admirals mobile app and Admirals Web Trader.

What Is the DAX 40 Index?

The DAX 30, or the Deutscher Aktienindex, has been Germany’s benchmark index since it was formed in 1988 and is one of Europe’s most popular stock indices amongst traders. Originally, the index was made up of the 30 largest German companies by market capitalisation.

However, as of September 2021, the index’s number grew with the addition of ten more of the country’s largest companies and became the DAX 40 Index. This increase in size is expected to improve the quality of the index, whilst also providing a broader representation of Germany’s largest businesses and, therefore, the overall economy.

DAX30 to DAX40 Index Changes

As well as growing in size, the index has also introduced stricter rules surrounding a company’s eligibility to be included. Going forward, as well as needing to satisfy market capitalisation requirements, new members will be required to post two years of positive earnings before interest, taxes, depreciation and amortisation (EBITDA) - this will not apply to companies already in the DAX index.

Moreover, the new DAX 40 Index will be reviewed twice a year, compared to the current annual review of the DAX 30, and constituents will be required to publish quarterly results as well as audited annual results.

Why Trade the DAX 40 Index with Admirals? Competitive Spreads! 

One of the most common types of brokerage fees is the spread. This is the difference between the buy price and sell price of an instrument and is commonly known as the bid-ask spread.  

While the buy price and sell price are based on the number of market participants trading at these price levels, your broker will often add a bit more to it as part of their fees.  

This is why choosing the right broker is critical when trading indices! 

Did you know that Admirals provides some of the most competitive conditions to trade indices like the DAX40 index? 

See for yourself in the comparison of the typical trading costs for the DAX40 index among different brokers below.  

DAX40 Index Trading Cost Comparison 

A comparison and collection of advertised spread and commission costs of different brokers trading the DAX40 and DJI30 indices, 22 November 2021.  

As you can see from the comparison above, Admirals provides one of the most competitive offerings to trade the indices mentioned above. The lower cost of doing business is key to long-term success.

You can access these low fees with an Admirals trading account, as well as enjoy these additional features: 

✔️ Zero requotes and high-speed market execution 

✔️ Fractional lots trading from 0.1 lot per contract 

✔️ Access to leverage trading so you can control a large position with a small deposit 

✔️ Potentially profit from rising and falling markets by trading long and short 

✔️ No dealing desk execution 

✔️ 24/5 trading of the world’s leading indices 

Trade Forex & CFDs

Get access to over 40 CFDs on currency pairs, 24/5

Why Is the DAX Index Changing?

The changes in the DAX Index are largely thought to be in response to the Wirecard scandal in 2019, in which Wirecard - at the time, a member of the DAX 30 – was exposed by whistleblowers for accounting irregularities and fraud.

The company subsequently collapsed and filed for insolvency after investigations found that around €1.9 billion was missing – a revelation that led to the termination and arrest of CEO Markus Braun.

This scandal negatively impacted investor confidence, not only in the DAX 30 but in the German financial markets in general. Partly in response to these events, the Deutsche Börse Group decided it was time to remodel the DAX Index and, thus, the DAX 40 Index is born.

The DAX Index Constituents

Below is a table showing the Dax Index constituents as of September 2021, with the ten new additions highlighted in green.

Companies in the DAX 40 Index
Adidas Allianz

BASF SE

Bayer 

Bayerische Motoren Werke (BMW)

Continental Covestro Daimler

Delivery Hero

Deutsche Bank

Deutsche Boerse

Deutsche Post

Deutsche Telekom

Deutsche Wohnen

E.ON

Fresenius SE & co

Fresenius Medical Care

HeidelbergCement

Henkel

Infenion Technologies

Linde PLC

Merck

MTU Aero Engines

Muenchener Rueckversicherungs-Gesellschaft

RWE
SAP Siemens

Siemens Energy

Volkswagen Group

Vonovia
Airbus

Brenntag

Hellofresh Porsche Puma
Sartorius

Siemens Healthineers

Symrise Qiagen Zalando

What Do the Changes Mean For Traders?

The addition of ten new companies to the DAX 40 Index means traders and investors will have an opportunity to gain greater broader exposure to the German financial markets and, as a result, the benchmark index will better reflect the wider German economy.

The increase in DAX index constituents also means that traders who hold positions in the index will benefit from greater diversification in their portfolio – a key part of an effective risk management strategy. This greater level of diversification reduces the ability of an individual company to influence the overall value of the index.

Moreover, the new companies have lower market capitalisations than the previous DAX index constituents, meaning that the index has greater potential for future growth than before.

How to Invest in the DAX 40 with Admirals

With an Invest.MT5 account from Admirals, investors can buy shares in all the DAX Index constituents, including the newest additions! The Invest.MT5 account also allows you to buy shares in Exchange-Traded Funds (ETFs) which track the DAX index!

In the following section, we will explain briefly how DAX ETFs work, in the meantime, if you are interested in registering for an Invest.MT5 account today, click the banner below!

Invest in the world’s top instruments

Thousands of stocks and ETFs at your fingertips

DAX ETFs

Exchange-Traded Funds (ETFs) are securities that are traded on stock exchanges and designed to track an index, sector or asset.

Therefore, a DAX ETF is designed to mirror the performance of the DAX 40 Index and does this by using investors’ funds to buy shares in all the DAX index constituents. This means that by purchasing shares in DAX ETFs, with a single investment, you are gaining exposure to the entire index.

If DAX ETFs sound like a good investment to you, you will be pleased to know that, with an Invest.MT5 account from Admirals, you can buy shares in the iShares Core DAX UCITS ETF!

Depicted: Admirals MetaTrader 5 – iShares Core DAX UCITS ETF Weekly Chart. Date Range: 11 November 2018 – 15 September 2021. Date Captured: 15 September 2021. Past performance is not a reliable indicator of future results.

Trading the DAX 40 With CFDs

DAX ETFs are not the only way to gain exposure to the entire index with a single investment. With a Trade.MT5 account from Admirals, you can trade Contracts for Difference (CFDs) on the DAX 40, FTSE100, S&P500 and many other major stock indices from around the world!

CFDs allow traders to speculate on both rising and falling prices, whilst also benefiting from the use of leverage – which permits traders to command larger positions than their account balance would otherwise.

In order to start trading the DAX 40 using CFDs with Admirals, follow these steps:

  • Open a Trade.MT5 account with Admirals
  • Download the MetaTrader 5 trading platform
  • Head to the Market Watch window on the left-hand side of the screen, locate the symbol for the DAX 40 Index [DAX40], right click and select ‘Chart Window’ in order to open a price chart. If the symbol is not already in Market Watch, you can search for it in the search bar at the bottom of the window
Depicted: Admirals MetaTrader 5 – DAX40 Weekly Chart. Date Range: 17 June 2016 – 15 September 2021. Date Captured: 15 September 2021. Past performance is not a reliable indicator of future results.

 

  • At the top of the screen, select ‘New Order’ to bring up the order window shown below. Here, you can specify the size of your order, set a take profit and stop loss, and select whether you want to buy or sell
Depicted: Admirals MetaTrader 5 – DAX New Order

Why Trade Indices Like the DAX40 Index with Admirals? 

✔️ Authorised and regulated by regulators such as the Financial Conduct Authority (FCA), Cyprus Securities & Exchange Commission (CySEC), the Australian Securities and Investments Commission (ASIC) and others.  

✔️ Access MetaTrader 4 and MetaTrader 5 for desktop, web and mobile and supercharge the platform with the exclusive Admirals Supreme Edition plugin for real-time trading ideas.  

✔️ Receive free market leading education, research, webinars and courses. 

✔️ Trade on more than 8,000+ instruments covering Forex, stocks, indices, commodities, ETFs and cryptocurrencies (depending on the jurisdiction).  

You can get started today by opening an account and trying all the services and products for yourself. Click the banner below:

Open a Live Account

Trade the Live Markets and Trade Efficiently

INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets and Admirals trademarks (hereinafter “Admirals”). Before making any investment decisions please pay close attention to the following:
1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
4. The Analysis is prepared by an independent analyst at Admirals personal estimations.
5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.

TOP ARTICLES
Trading CFDs on the DAX Index: A Beginner’s Guide
How much do you know about the DAX 40?This article will provide traders with a detailed breakdown of how to trade CFDs on the DAX 40 index, reasons to trade DAX 40 (formerly DAX 30) CFDs, a discussion of the benefits of trading index CFDs on the DAX index, and a DAX 40 trading strategy that can be p...
How to Scalp The DAX40 Index With A Scalping Strategy
Find out how to trade with the DAX 40 (formerly DAX 30) index in this detailed guide covering: What is DAX trading?How to trade CFDs on the DAX 40 index, and learn a new scalping strategy that you can use whenever you trade with DAX 40.We would also like to bring to your attention that Admirals (Adm...
How to Trade CFDs on DAX 40: Heiken Ashi
How much experience do you have trading on the DAX 40?CFDs on this particular index are an optional instrument to trade, mainly because of its popularity and volatility. This article will present you with an advanced strategy for trading CFDs on DAX 40 (formerly the DAX 30).Bear in mind that this is...
View All