U.S. Buyers Own Largest Proportion of DAX Shares: StudyJonathan Morgan
U.S. investors hold the biggest proportion of shares listed on the DAX Index, pushing domestic German entities into third place, according to research from the Deutscher Investor Relations Verband e.V.
North-American investors held about 32 percent of shares in DAX companies at the end of 2013, followed by Continental European buyers with 19 percent, and Germans with 18 percent, the study, published yesterday, showed.
Investors from the U.K. and Ireland hold a combined 18 percent. France and Switzerland were the largest continental-European investors in the DAX. The report, conducted by DIRK and financial-data provider Ipreo Holdings LLC, found Asia-Pacific entities held 3 percent of DAX-listed shares.
“When U.S institutional investors are looking at Europe as a whole and deciding which part of it to invest in, Germany is still seen as a safe haven with a robust economy and political system and economic growth,” Kay Bommer, general manager of DIRK in Frankfurt, said in a phone interview. “I feel that is an advantage for German companies in particular.”
BlackRock Fund Advisors is the biggest single U.S. investor in the DAX, with shares worth $19.3 billion. The Vanguard Group Inc. holds $14.5 billion, while Capital World Investors was the third-biggest U.S. owner, with $12.2 billion. Institutional investors hold 63 percent of all shares in the DAX, the study found.
Deutsche Boerse AG, the operator of the Frankfurt-based stock exchange, was the preferred execution venue for 37 percent of DAX investors, according to the study. Alternative trading platforms absorbed 16 percent of trade flow, while 3 percent went through dark pools and the rest through direct trading.
The DAX is one of the few national benchmarks to add reinvested dividend payments to the share-price performance when calculating the index level, thereby fully reflecting an investor’s returns.
Membership of the 30-company DAX is based on two criteria: free-float market value and liquidity. A stock can enter the gauge if it ranks number 30 or above in terms of market capitalization and trading volume, provided an existing member ranks worse than 35 in one of the criteria, according to Deutsche Boerse.