German flagship index DAX finally expands after 33 years

The 33-year-old German index DAX is finally expanding from 30 to 40 companies after consultation with hundreds of companies and financial institutions. From September 20, 2021, the DAX will include Porsche, Puma, Airbus, Zalando, Siemens Healthineers, Symrise, Sartorius, Brenntag, Hellofresh and Qiagen, to cover 80% of the German market. Deutsche Börse Group, DAX's operator, expects greater diversification and potentially more stability for investors with the bigger index.

The move comes one year after financial giant Wirecard's collapse, owing creditors more than €3.5 billion after discovering a gap in its books which turned out to be the result of a complicated global fraud. The scandal led to the company's dismissal from the DAX from August 24.

Despite underperforming the S&P 500 since inception (1988), the DAX generated an average annual return of 8.6%, including dividends. An initial investment of €10,000 would now be worth close to €158,870.

For investors interested in holding German Equities, there are several ETFs tracking the DAX. One of those ETFs is Lyxor DAX (DR) UCITS ETF, which manages €707.98 million in assets. Its top constituents include Linde PLC (10.86%), SAP AG (10.54%) and Siemens AG (8.56%).

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