Deutsche Börse has just announced rule changes to the inclusion of companies in the MDAX, SDAX and TecDAX indices on Friday, 18 May 2018. T
he tech and classic sectoral separation in the indices will be eliminated. By ending the previous separation into classic and tech segments, tech companies will also be included in the MDAX and SDAX in future. Further, DAX companies that are in the technology sectors can now also be included in the TecDAX index. In addition, the MDAX and SDAX indices are being expanded: the number of stocks in the MDAX is rising from 50 to 60 and the number of stocks in the SDAX from 50 to 70. The TecDAX index, by contrast, will remain unchanged and continue to consist of 30 companies.
The new rules will be applied for the first time for the September chaining and will be reflected in the indices from 24 September 2018 onwards.
Expanding the MDAX to 60 stocks and the SDAX to 70 stocks both ensures the indices are representative and continues to safeguard the high level of liquidity and tradability. The changes are based on responses Deutsche Börse received in a broad market consultation.
From 18 June 2018, Deutsche Börse will publish so-called “shadow indices”, which simulate the behaviour of the MDAX, SDAX and TecDAX under the new rules and take into account the latest data in the May ranking list. They primarily provide investors an outlook regarding the impact on risk and return. These shadow indices are based on historical back-calculations, but do not yet provide any information on the future composition of the indices. They will be calculated temporarily until the new methodology comes into force on 24 September 2018 and will be published for information purposes only. The changes to the Guide to the Equity Indices of Deutsche Börse AG will be announced at a later date.
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