Starting Monday, Germany’s blue-chip DAX index will include 10 more companies to become the DAX-40. Selection criteria have been decisively changed.

The 10 newcomers — in the order of their market value — are Airbus, Zalando, Siemens Healthineers, HelloFresh, Symrise, Sartorius, Porsche Automobile Holding, Brenntag, Puma and Qiagen.

The most important selection criterion was the firms’ market capitalization on the basis of diversified holdings during the final 20 trading days in August, meaning that stock portfolios of over 5% of the overall value were not considered.

Another important criterion for entry: Companies listed on the DAX now have to log profits — a crucial lesson learned from the Wirecard accounting scandal.

What’s the impact?

Pundits are not expecting any major share price fluctuations as a result of the larger German stock market index. What is true is that DAX-related equity funds will have to reflect the changes made in the composition of the index. But large institutional investors have already secured equity stakes in the new DAX members in the past few weeks anyway as most of the names of the newcomers had been known for months.

The DAX expansion is a useful measure, says Jürgen Kurz, a spokesperson for Germany’s leading association for private investors, DSW. He notes, though, that the index is still pretty industry-heavy, with only Zalando and HelloFresh joining Delivery Hero in the online retail section.

Joining the health services sector are Siemens Healthineers, vaccine supplier Sartorius and biotech company Qiagen. Symrise is the first DAX firm to represent the food and beverages sector.

The 10 newcomers — in the order of their market value — are Airbus, Zalando, Siemens Healthineers, HelloFresh, Symrise, Sartorius, Porsche Automobile Holding, Brenntag, Puma and Qiagen.

The most important selection criterion was the firms’ market capitalization on the basis of diversified holdings during the final 20 trading days in August, meaning that stock portfolios of over 5% of the overall value were not considered.

Another important criterion for entry: Companies listed on the DAX now have to log profits — a crucial lesson learned from the Wirecard accounting scandal.

What’s the impact?

Pundits are not expecting any major share price fluctuations as a result of the larger German stock market index. What is true is that DAX-related equity funds will have to reflect the changes made in the composition of the index. But large institutional investors have already secured equity stakes in the new DAX members in the past few weeks anyway as most of the names of the newcomers had been known for months.

The DAX expansion is a useful measure, says Jürgen Kurz, a spokesperson for Germany’s leading association for private investors, DSW. He notes, though, that the index is still pretty industry-heavy, with only Zalando and HelloFresh joining Delivery Hero in the online retail section.

Joining the health services sector are Siemens Healthineers, vaccine supplier Sartorius and biotech company Qiagen. Symrise is the first DAX firm to represent the food and beverages sector.

MDax now weaker?

Whether the DAX enlargement will harm the smaller MDax index is yet unclear, experts say. The MDax comprises medium-sized firms and now shrinks from 70 to 60 members. “The index’s 10 former heavyweights are gone,” said Halver, which, he added, could mean a temporary weakening of the index.

On the other hand, the remaining MDax firms are often a lot more flexible and show a far more dynamic profit trajectory. Recent developments bear this out clearly. While the DAX has gone from 1,000 points in December 1987 to about 16,000 points now, the MDax has shot up to some 35,000 points, starting from the same level as its bigger brother.