Rolle im Portfolio
This fund offers investors access to the 30 largest German companies. The DAX index covers 80%-85% of the German total market capitalisation and is well-diversified across several sectors. As such it could be used as a core holding in a Germany-centric portfolio or as a tactical tool to express a single-country view.
All index constituents share one common characteristic: They are export-oriented and therefore not highly dependent on demand from Germany or even broader Europe. With the entire portfolio invested in large caps, the fund has an overweighting to large caps and an underweighting to small and mid-caps compared with the average peer in the Germany large-cap equity Morningstar Category, which includes both active and passive offerings.
As the index objective is to track the performance of a fixed number of the largest German companies, the portfolio is likely to consistently have higher average market capitalisation compared with its category peers. This could prove useful at times of market uncertainty and downturn, when investors tend to turn to the safety of blue chips. At times of strong economic expansion, the fund may lag, largely because active fund managers have the flexibility to venture down the market-cap ladder to pick up additional return. As of this review, the fund has delivered average performance relative to the category median during trailing three- and five-year periods.
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