Live Markets: It doesn't matter to be in the DAX

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27/08/2026 12:18

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IT DOESN'T MATTER TO BE IN THE DAX 
STOXX is set to review the DAX indices on September 3 but getting promoted into the blue chip DAX index from the midcap Mdax might not do much for a stock beyond a bit of pride. 
Deutsche Bank have run the numbers and found that companies joining the DAX have tended to underperform on the day of the rebalancing, where as those that left tended to outperform. 
The logic, they say, is "The greater weighting companies receive in the MDAX often outweighs the larger volume of DAX-tracking funds, creating net buying pressure for DAX leavers and selling pressure for new entrants." 
You might think that would be just a one day thing, but Deutsche found a year after addition to the DAX, new joiners underperformed the index by 8% over the past 20 years. 
Out of 41 new joiners, only 16 managed to outperform the index in their first year as a member.  
Their theory as to why is that many companies experience strong share price gains before joining the index — after all that's necessary to get them in — and so are then vulnerable to profit taking. 
That one doesn't work the other way around though. Deutsche find companies that underperformed and so left the DAX continued to underperform the index in the year after dropping out. 
This may all matter for Lufthansa LHAG.DE Deutsche say they are close to getting into the DAX at this latest rebalance. They don't currently meet the criteria, though are close enough that a strong performance in the next few days ahead of the August 31 cut off could put them in. 
If so, Zalando ZALG.DE and Scout24 G24n.DE are the most likely to drop out. 
     
(Alun John)
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