Industry Updates

STOXX raises capping limit on DAX indices to 15%

To bring it in line with international standards

Theo Andrew

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STOXX will raise the capping limit on the family of DAX indices from 10 to 15%.

The move means the maximum weight of a stock will now be 15% across the DAX, MDAX, SDAX and TecDAX indices.

The change comes after a month-long consultation period across the group’s stakeholders and is designed to bring the family in line with international standards.

Should the weighting of an individual company go above the new capping limit, the index will be adjusted at its quarterly index review.

STOXX said the 10% capping limit resulted in 38 incidents over the past decade while no companies would have been capped had the limit been 15%.

The largest ETF to track the DAX, comprised of the 40 major German blue chip companies, is the $4.3bn Xtrackers DAX UCITS ETF (XDAX).

The largest company in XDAX is software company SAP, with a 10.6% weighting. The company is up 14.1% over the month helping drive returns of 7.9% for the index, as of 23 November.

Likewise, the MDAX – the next 50 largest German companies – is up 8.4% over the past month.

European shares have been climbing higher in recent weeks following several positive corporate earnings results and the pause in interest rate hikes by the Federal Reserve.

Deutsche Boerse said the changes will take place at the index review in March 2024.

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