Stock index: SDAX stocks

SDAX: General Information

The SDAX is the follow-up index to the MDAX, which includes the 50 largest companies after the DAX. The SDAX comprises the 70 largest companies that follow the 50 MDAX companies. These are primarily small-cap companies. The index was introduced in 1996, but then recalculated to provide a good comparison with the DAX.

The index is based on the daily data of the electronic exchange Xetra, which is open from 9:00 to 17:30. The DAX family includes the DAX, MDAX, and SDAX. Companies can move up or down in the SDAX based on their performance. Which companies are included is determined by Deutsche Börse, the manager of the index.

SDAX: Calculation of the Index

The index is updated twice a year, in March and September. This is when it is checked whether the companies still belong to the 70 largest after the MDAX or not. If a company is therefore promoted or demoted based on market capitalization, this process will be carried out in one of these months.

The SDAX is calculated as both a price index and a performance index. Most commonly, the performance index is referred to, as dividend payments are reinvested here in the calculations. This is not taken into account in the price index.

Overview of the SDAX index history

As mentioned in the introduction, the SDAX was introduced in 1996 but back-calculated to December 30, 1987, to start at 1,000 points there.

Significance for individual investors

Compared to European indices, the SDAX is performing quite well. Over the past 5 years, the index has delivered a return of 49%, while the Euro Stoxx has only achieved 25% and the FTSE 100 5% in returns. From a historical perspective, investing in the SDAX is not a bad choice if one wants to invest in Europe or Germany.

On an international level, the German Small Cap Index can already compete significantly better than the DAX or MDAX. The very broadly diversified MSCI World has generated a return of 66% in the last five years, albeit not excessively high. However, an investment in this index should be carefully considered.