STOXX adjusts capping rule for DAX indices

Nov 27th, 2023 | By | Category: ETF and Index News

STOXX has announced a significant change in the capping rule for the DAX index family, leading benchmarks for the performance of German equities.

STOXX adjusts capping rule for DAX indices

The DAX indices are leading benchmarks for the performance of German equities.

The maximum weight of an individual stock in the DAX, MDAX, SDAX, and TecDAX indices will now increase to 15%, up from the previous limit of 10%.

The decision follows a comprehensive market consultation conducted from 11 October to 8 November 2023. The new capping limit will be implemented at the index review in March 2024.

The adjustment means that if the weighting of any single company in these indices exceeds 15%, the index will undergo modifications at its next quarterly review.

According to STOXX, the new capping limit aligns the DAX index family with international norms and offers a more balanced representation of Germany’s leading companies.

The DAX is Germany’s premier equity index, showcasing 40 of the largest and most actively traded blue-chip companies. Key players in the DAX currently include SAP (10.6%), Siemens (9.5%), Allianz (7.9%), Airbus (6.8%), and Deutsche Telekom (6.5%).

STOXX notes that, over the past decade, under the 10% capping rule, the DAX index encountered 38 instances where the limit was reached. However, had the 15% limit been in place, none of these incidents would have occurred.

The change is particularly significant for the largest ETFs tracking the DAX in Europe, notably the €7.7 billion iShares Core DAX UCITS ETF (EXIC GY) and the €4.3bn Xtrackers DAX UCITS ETF (XDAX GY).

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