The Deutscher Aktienindex known as the DAX index is the benchmark equity market index of the German economy. The index is composed of 30 largest companies listed on the Frankfurt Stock Exchange and also takes into account the dividend yields in addition to the performance of stocks thereby reflecting the actual performance of companies in the index. The DAX was launched on 1st July 1988 and has a base value of 1000 as of December 31, 1987.
The composition of the index consists of 30 companies listed on the Frankfurt Stock Exchange with respective sector allocations. Chemicals constitute 23.9% of the sectoral allocation of the index followed by Automobiles and Auto Components at 15.9%, Industrial Goods and Services at 13.4%, Insurance at 10.4%, Technology at 8.5%, Banks at 6%, Personal and Household Goods at 5.2% and other sectors at 16.7%. The index covers approximately 80% of the German market capitalization of companies.
The DAX has given a return of 17.47% on a year on year basis and remained flat on a month on month basis in April 2014. The index reached an all-time high of 9743 in the month of January 2014. The index has a Price to Earnings ratio of 22.6 in the current scenario. The Dax along with the Dow, Nasdaq and S&P 500 is one of the best performing equity indices over the last one year.The Siemens AG company has the highest weightage of 9.97% in the DAX index followed by Bayerische Motoren Werke AG with a weightage of 9.81%, BASF SE with 8.94%, Daimler AG with 7.73%, Allianz SE at 7.15% and SAP AG at 6.86% while others have less than 5% weightage each in the index.