In September the number of companies will be increased to 40. But even then, when you compare it to popular US indices like to SP500 or even NASDAQ100 you can already see by the number of companies, that it is still tiny. The market cap of DAX30 is roughly 1 trillion $, while the SP500 has about 35 trillion $ in it.
In my mind if you want to invest into Germany, you could buy HDAX, which also includes MDAX and TECDAX and at least consists of about 100 companies. Unfortunately it is not at all popular.
Germany just has very little publicly traded capital, partly because of the privatly owned Mittelstand, sometimes resulting big corporations like Freudenberg, Bosch and others still being owned by a family or a foundation. Both of them would easily be included in the DAX.
The other problem of course is totally missing out on the whole IT thing.
As an aside, "sophisticated" sounds like an applause word which is not intended: I think overall the benefits outweigh the harms for Germany to have its business decisions made more by industrialists than financiers.
You might like Michael Hudson's comment: "when left-wingers–or people who call themselves left-wingers, they’re really not left-wingers at all; they’re, I don’t know what, post-left–very few people who call themselves left-wingers distinguish between industrial capitalism and finance capitalism."
They're not true monopolies but it's close enough in many respects
BMW, Daimler, VW all stuffed into one $4.3t economy. It'd be like if GM and Ford were ten times larger than they are in relation to the size of the US economy.
Scaled up to the US economy in size, those three would be up around $3 trillion in sales (five to six times the size of Walmart).
So they're co-monopolies, towering over the German economy, sharing it all with one or two other giant German companies. I suppose that's nice of them, sharing is caring.
well kinda. bmw basically is owned to 46% by two people and they control it.
vw the same, most voting stock is in the hands Porsche Automobil Holding SE, basically owned by wolfang porsche, his ancestor was ferdinand porsche.
yeah on paper they are traded. but not controlled. (mercedes is different here)
but a lot corporations in germany are at least still controlled by descendants
Also, the US' GNP is about 5 time that of Germany. If the NASDAQ100 is "big enough", the DAX should be big enough as well.
To stick to the GNP you mentioned: Let's say you want to own the whole world economy or you are European/German and want to own part of your own local economy. You buy something like an MSCI World (66% US) and now want to increase the miniscule percentage Germany has in them (<3%) to account for the GNP being 5 times smaller, not 22 times like the market cap suggest. Do you now want to do that by buying only 30 companies on top of the ~1600 companies inside the MSCI World? That would be extremly heavy bets on those companies. So something like a Europe STOXX 600 is much more useful for that purpose.
DAX30 is an extremly narrow set of companies, which do not have much in comman, except that they are based in Germany. Even if you wanted to bet only on their "Germanness" for whatever strange reason, why would you buy only 30 companies?
NASDAQ100 is not "big enough". You do not buy it because of its size, you buy it, because you want to bet on tech. It just happens to still be 15 times bigger than DAX30.
People buy local indices because the are easier to grasp and reported on in the news daily. Other national indices rarely are.
Diversification via stock ETFs is just 5 buckets: World, US, US Tech, emerging markets, Europe.
That is actually an argument for the bigger index, not the smaller.
The report states "German investors continue their divestment from the DAX [...] DWS Investment was the biggest domestic seller, followed by BlackRock Asset Management (Deutschland)" and "North American investment continued to grow [...] mainly driven by Vanguard".
If a German citizen sells a BlackRock ETF and switches to Vanguard (e.g. due to lower TER), would that reflect in the report as "German divestment from the DAX"?
The other thing is, you want to diversify geographically to protect you against weakness in your home economy, and when that happens the strength of your home currency tends to fall off. Hedging your currency risk is exactly what you don't want in that scenario.
While Vanguard and Blackrock own a big chunk of the DAX, what this presentation does not show is for whom do Vanguard, Blackrock, et. al manage these assets for?
Is this just Germans buying American products that require American investors to buy German stocks?
Lyxor is often cheaper. By Lyxor buying Comstage and Amundi buying Lyxor, there is a big European champion now.
The older ones are swap-based, the new ones are not. iShares has the biggest offering. Lyxor and Xtrackers are often cheaper for very popular indices. Vanguard is just entering the market.
I think it is a very healthy competition and TERs are constantly going down.
The surplus exists only because the biggest digital companies (Google, MS, IBM, FB, ...) are not counted for in the USA-German trade balance.
The biggest US digital/tech companies aren't remotely coming close to having enough unaccounted for business in Germany that could fill in $67 billion.
Do these transactions result in uncounted dollars flowing back to the U.S.?
Yes, but not directly. Unless you count that all those profits are actually trade surplus with Ireland, Luxembourg and other tax heavens, and not with Germany, France and other countries where those "digital goods and services" are sold.
They basically own 10% of the DAX. Which is a massive concentration of power over german companies (and it must be similar in other countries).
To the point that if I was a regulator I would question whether it is ok to have a single entity (and the likes of Blackrock) have that much control over the country's corporate landscape.
same organizations, different union
(SWFs are a different animal)
People sank their entire life savings into that shit.
I just skimmed through the wiki page and well
Involved are: members of austrian secret service, russian secret service, german politicians on highest level, german biggest media empire(Axel Springer) ... and one of the villains is now supposed to be in russia?
I think there are many pieces missing in the puzzle.