[ad_1]
A crazy moment: traders shake hands screaming. Everywhere on the floor are crumpled pieces of paper. It happened in the summer of 1988 on the Frankfurt Brse. Today, computers have supplanted dealers, from the bustle of previous years, there was not much left. But there is a constant: the DAX.
On July 1, 1988, 30 years ago a course was organized for the most important German stock market index today. The DAX includes the shares of the 30 largest companies listed on the Frankfurt Stock Exchange. These securities cover around 80% of the market capitalization and thus offer a representative image of the German stock market.
Above all, the performance is impressive: the first official course of 1,163 points in the top 13,596 points. By taking the starting price of 1,000 points on December 31, 1987, calculated by Deutsche Brse, the DAX has gained 8.6% so far each year. Even in small steps, investors could earn a lot of money: who would have invested 50 euros each month, would today capitalize 18,000 euros in mathematical terms with a portfolio of nearly 69,000 euros.
The increase in money is not the work of raging speculators, but a reflection of entrepreneurial success and economic dynamism. The gross domestic product (GDP) of the Federal Republic has almost tripled in 30 years. Many companies have further strengthened: Siemens, for example, posted net profit of the equivalent of 673 million euros in 1988, according to data from the Bloomberg Financial Department – last year, he was over six billion euros.
Global Winners
An important accelerator is globalization: the United States and especially the Chinese economy have grown much faster than the German GDP. This also benefits German export companies. During the year of creation of the DAX, Siemens achieved more than half of its sales in the West of Germany while still divided – today more than 85% in the # 39; abroad.
The speed is even slower at Volkswagen. The car company has increased its net profit since the year of the DAX foundation from 365 million to more than eleven billion euros. The global market also plays an important role for the Wolfsburgers: the VW group delivered more than 40% of its vehicles last year in China, thus rewarding the expansion that began in the 1980s in what was then exotic for many western giant empire companies.
To really benefit from the DAX price rises, investors had to deal with serious crises. In particular, the two major accidents after the turn of the millennium became aware: From March 2000 to March 2003, the DAX lost nearly three quarters of its value, and more than half of July 2007 to March 2009. Such burdens are on the nerves, but these are the prices that investors have to pay for the long-term high returns of the stock markets.
Many private investors have not borne the psychological tension: The statistics of the German Stock Institute show that the number of stock owners and funds of Actions in 2000, in particular, has seen a spike. To date, this level has not been reached again, the number of shareholders has risen at least after all.
The DAX is popular among investors but also a bit strange. Most major indices, such as the Euro Stoxx 50, track the performance of members. In contrast, the DAX also includes dividend payments from companies. In the long run, this has a major impact: as a price index, that is, without dividends, the DAX is only about 5,700 points – with dividends more than twice as high.
Members are weighted by market capitalization . SAP is the heavyweight. The software company currently accounts for about ten percent of the DAX. The five largest companies – with SAP, Siemens, Bayer, BASF and Allianz – together account for more than 40% of the index. The performance is therefore determined by some important actions. On the other hand, the most successful companies are often smaller companies. Over the past decade, investors have made the most money with Adidas, Henkel and Continental.
Compared to other country indices the DAX is small with 30 values: the Spanish Ibex has 35 members, the French CAC 40. UK investors are based on the FTSE 100, in the US on the S & P 500.
An increase in the DAX, for example, to 50 companies would have advantages for investors: the weight of large companies would decrease.
Sectors until then underrepresented such as technology, media or even mechanical engineering would be improved. However, given the popularity of the index, the German stock market sees no reason to proceed with a reform.
The most important question for investors: Where can the DAX increase? The major trends – technological advances and the globalization of the global economy – are expected to further boost corporate profits and lay the foundation for price gains. Assuming that the DAX is growing at its fastest pace, it will reach more than 40,000 points in 15 years and nearly 65,000 points in its 50th anniversary.
It may not be so simple in practice. The nerves of investors will also continue to be tense in the future – the usual recessions, presumably even tougher crises, will put pressure on prices again and again. Currently Donald Trump is the great maker of fear with his attacks on world trade.
In a simulated simulation, StarCapital took into account the prices of the last 130 years as well as the DAX valuation ratios for December 2017 and calculated a price target. The main scenario is that the DAX will reach 35,000 points by December 2032. This would almost triple the value from the current level. That would be a reason to celebrate.
DAX ETFs
Which index fund for whom
by Andreas Hohenadl
To participate in the performance of the DAX at lower cost, a dozen ETFs from different companies are available. This raises the question: Which of these Exchange Traded Funds (ETFs) is the best?
The answer: It depends on the type of investor. Because their work, the ups and downs of the DAX one to one to understand, all generally as well. Nevertheless, slight differences in performance can be felt in the long run. Anyone wishing to keep a DAX ETF in the securities account as a current item will be fine with the Deka DAX in the accumulation variant (ISIN: DE 000 ETF L01 1) or the expiring variant ( DE000 ETF L06 0).
If an investor is more interested in the tactical use of a DAX index fund from time to time, ie by trading it more frequently, the iShares Core DAX ETF (DE 000 593 393 1) is a good choice. Because the product of the Blackrock subsidiary is by far the largest (around seven billion euros), and it is the most traded ETF in Germany. This popularity leads to the fact that with him the margin between purchase and selling price is extremely low.
Those who appreciate absolute security on the other hand, use the ComStage 1 DAX ETF (DE 000 ETF 901 7). Securities lending is explicitly excluded for this index fund. Many ETFs offer shares for a fee (and collateral) to generate additional income. The ComStage 1 ETF contains all 30 DAX securities at all times.
Favorites DAX
Dividends and Defenses
by Sven Parplies
At first glance, the DAX is simply a collection of 30 large German companies – for a strategic investor, the index is divided into groups, with which one can customize his portfolio. The writing goes through the index.
Popular are the dividends. For reliable companies, investors can benefit from distribution and take advantage of inevitable price fluctuations. On average, the DAX is currently forecasting a dividend yield of 3.4% based on expected distributions for the next twelve months. Anyone who now pays 1000 euros to a DAX ETF auspicious can therefore expect a cash payment of 34 euros before taxes.
The level of dividend yield varies considerably within the index: five companies – Deutsche Telekom, Munich Re, Allianz, BMW and Eon – currently account for more than five percent, Daimler even more than six percent. Important: These figures are based on badysts' estimates, which are not necessarily implemented by companies. Above all, the high value of Daimler is suspicious. Apparently, some investors doubt that the car company actually delivers to the extent expected.
An aid gives the dividend policy companies. Many have set clear guidelines on how much money they want to marginalize their shareholders. Very concrete is the German Telekom. For the 2018 fiscal year, there should be a premium of five to 70 cents per share. From this, the level of distribution should be based on the development of adjusted earnings per share, but at least there should be 50 cents. In this case, the dividend yield at the current price is always above 3.5%.
There are also clear announcements of the insurance companies : The alliance wants to distribute half of the annual profit among the shareholders. At least, the dividend per share should be maintained at the level of the previous year. The hardness test is yet to come before Allianz, especially when the economic environment is deteriorating and profits are dropping significantly.
Already resistant to stormy weather rival Munich Re. The reinsurer has not reduced its dividend for nearly 50 years and intends to continue this series.
The Right Combination of Industries
According to industry and business model, a business is better or less well protected against crises. Cyclical sectors are strongly represented in the DAX. The automobile industry, for example, still accounts for nearly 15% of the index despite the already persistent weakness of these values. Faced with weaker early indicators, it makes sense to weigh more heavily the actions of the defensive sectors.
The real estate company Vonovia offers a defensive dividend yield and slightly above average. The Bochumers own and manage around 355,000 apartments in Germany. The value of the portfolio is 30 billion euros. Because real estate regularly generates income, the dividend rests on a solid foundation. A problem could be rising interest rates, because project financing becomes more expensive. Until now, however, economists from the eurozone do not expect abrupt reversal of interest rates.
Because people get sick regardless of the economic situation, the stock of the Fresenius Health Care Group also has a defensive quality. Bad Homburger not only treats chronic kidney failure and drug production, but also offers a broad portfolio.
The SAP software company also has a defensive quality because high-performance computer systems are essential for any business. SAP is growing strongly in the Cloud business, where customers use software via external servers. SAP offers a mix of growth and defensive strength. As for Fresenius, there is a steadily rising dividend that, at just over a percentage point, is more symbolic.
Five strong values of the DAX (pdf)
The DAX of the future
Candidates for the Ascension
by Sven Parplies
Welcome to the DAX. In March, Covestro was included in the German leader index. The CEO of the time, Patrick Thomas, spoke of a "confirmation of the successful development of our company". Among the shareholders, however, there is a hangover after the promotional ceremony: Since the Deutsche Brse announced the promotion of the specialty chemicals company, the price has dropped. The experience is not new: the climbers of the DAX often have trouble finding their happiness.
uro sunday recalculated: Over the last ten years, twelve companies have progressed in the DAX – seven of them have outperformed the index in the first year. Covestro is already four months behind by more than ten percentage points and will become the eighth Schwchling.
Make money to shareholders with newcomers mainly in the period before the decision to index. This can be explained: of course, newcomers are stocks that have outperformed well, after all, they must exceed at least one DAX member.
If the hike is at hand, additional forces are setting up: short-term investors speculate that index funds will buy the newcomer's stock and push back the price. If the climb is then officially announced, the potential is often maximum.
If you want to profit as an investor you must invest very early in the candidates and at the same time take the risk that an action will not end in the end . Deutsche Brse reviews the composition of indices four times a year. The best odds are the Challenges in September, as the requirements are not as strict.
The most important criterion is the market capitalization of freely tradable shares. On this basis, Wirecard, a software company specializing in digital payments, and Deutsche Wohnen, a real estate company mainly present in Berlin, are already among the 30 largest companies of the Frankfurt Stock Exchange.
The two candidates must innovate for a place in the DAX: they must realize significant gains in the trading volume of their shares, the second criterion of admission. In addition, the relegated potentials – currently RWE, Commerzbank and Beiersdorf – in the ranking continue to skid. For the next index change in September, Wirecard has an outside chance.
From the second row
In the longer term, other companies could flourish: The perfume and fragrance specialist Symrise is close to the smaller members of the DAX after Brsenwert. Siemens Healthineers, a specialist in medical technology, owns 85% of Siemens.
If the parent company reduced its stake to about 50%, the mother's daughter could follow the DAX. The online store Zalando is also retained by Groaktionre: only 58% of the shares are in free circulation. If this rate increases, Zalando would also be a candidate for the first league.
On average, a DAX company was traded every ten months. More than half of the entries have disappeared – bought as Feldmühle Nobel and Mannesmann, melted like Veba and Viag or ousted by newcomers. First five banks remained only two. Just three years ago, Vonovia was the first real estate company to join the group. ProSiebenSat.1, the first media company in the history of DAX, could only hold up briefly.
Are the relegated perhaps the best investment as a riser? Who must go down, is usually in crisis. The threat of descent increases the pressure on the stock. So, when this happens, a negative scenario must already be dealt with in the course.
The story does not give a clear result: out of the last twelve dropping out, half is better developed than the DAX the first year after the indexing decision, the 39, the other half is aggravated. And: Only two relegated players have returned to the leading index up to now – Continental even twice and Infineon.
Candidates for promotion to the DAX (pdf)
DAX family
Five Strong Girls
by Sven Parplies
The DAX has become a big family. The Deutsche Brse now manages 859 stock indexes that bear the mark of the most popular German stock index. Most of them are more exotic clues used by institutional clients for specialty products. But also for private investors, there are lucrative alternatives to the parent index in the DAX index family. uro on sunday introduces five of them.
The best known are the second-line indexes: MDAX and SDAX are the companies that did not enter the DAX based on market capitalization and turnover. In the rally, both indices were able to outperform the DAX significantly more. The main reason is that small businesses focus more on niche markets. If the demand is good, the leverage for the increase in profits is quite strong. On the other hand, for large companies, there are often brocaded structures and almost always an activity sector with problems.
The high concentration of small firms can be a problem in times of crisis. That's why these stocks often lose more weight in falling markets than heavyweights. The dividend yield is also lower for smaller stocks. The Deutsche Brse will move the MDAX in September from 50 to 60 members, the SDAX going up to 70.
German technology stocks are in the shadow of major US technologies, but they are clearly on the rise. In the past five years alone, TecDAX has almost tripled its value. From September, this index will be rebuilt: it will remain at 30 members, but for the first time the DAX values are also recorded. The candidates are SAP, Infineon and Deutsche Telekom.
DivDAX selects in the DAX the 15 stocks that have the highest dividend yield on paper. One theory is that high yield stocks are high quality companies or undervalued stocks. But a high dividend yield can also be a warning sign that the company must reduce its payments. As a result, the balance sheet of the DivDAX division is mixed: Since its launch in March 2005, the dividend subsidiary has developed almost exactly as the parent index.
The DAX has clearly beaten the DAXplus Family 30 index. This basket of stocks selects among stocks listed on the Frankfurt Stock Exchange companies whose founding family holds at least 25% of the rights. of the Board of Directors or the Supervisory Board and holds at least 5% of the voting rights. The idea is that the founders run a business with more care than external managers and that this translates into a positive long – term course of action. From
Index index members include SAP and Henkel DAX companies, but also a number of smaller companies such as Krones, Delivery Hero and CTS Eventim.
Investing in the DAX family (pdf)
______________________
WhatsApp Newsletter
Image Sources: Pavel Ignatov / Shutterstock.com, Julian Mezger, TijanaM / Shutterstock.com
[ad_2]
Source link
