DAX® sets the new benchmark for sustainable German equity portfolios
The DAX® 50 ESG index employs two complementary approaches to incorporate ESG principles into the selection criteria:
The index features standardized negative screens for companies that are involved in controversial activities – controversial weapons, military contracting, nuclear power, thermal coal, tobacco – or fail the standardized ESG screens within the Global Standard Screening.
The methodology considers environmental, social and governance (ESG) scores in the stock selection.
DAX 50 ESG
The methodology is designed to ensure an ESG index whose liquidity and risk-return characteristics are similar to those of the flagship DAX®.
The selection universe for the DAX® 50 ESG index is the HDAX® index, which comprises all equities that belong to either the DAX®, MDAX® or TecDAX® indices.
From this universe, the DAX® 50 ESG tracks the performance of the 50 largest, most liquid German market stocks that have passed standardized ESG screens related to Global Standards Screening, as well as the involvement in controversial weapons, tobacco production, thermal coal, nuclear power and military contracting, and feature comparably good performance based on their Environmental, Social and Governance criteria.
Selected components are weighted by free-float market capitalization, subject to a 7% component cap.
The DAX® 50 ESG is designed to be suitable as underlying for derivatives, structured products and exchange-traded funds, and to be used as the ESG flagship benchmark for the German equity market.
For a description of the selection methodology and the review calendar, please click here.