What Is the DAX 40 Index? - Constituents, Changes & How to Invest in the DAX40 Index!

September 16, 2021 12:40 UTC
Reading time: 10 minutes

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! ⬇️

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 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 

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

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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!

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.  

✔️ Enjoy a negative balance protection policy which is a regulatory requirement for Admiral Markets UK Ltd and Admiral Markets Cyprus Ltd but added as an additional FREE policy for Admiral Markets AS Jordan Ltd and Professional clients using Admirals Pro! 

✔️ 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. ⬇️ 

About Admirals 

Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks

Roberto Rivero
Roberto Rivero Financial Writer, Admirals, London

Roberto spent 11 years designing trading and decision-making systems for traders and fund managers and a further 13 years at S&P, working with professional investors. He has a BSc in Economics and an MBA and has been an active investor since the mid-1990s