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How to Trade the DAX Index in the UK

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Bullish on the German economy but not sure which individual companies to invest in? In this guide, we’ll examine the DAX index UK.

DAX Index Investment Platforms

We’ll highlight some popular brokers you can use to invest in the DAX today.

1. eToro

eToro is one of the popular brokers for UK investors.etoro logo This is because the broker supports a wide range of payment types, and allows you to invest commission-free. eToro offers over 2,000 stocks to invest in and around 250 different ETFs to choose from. You can trade more than 40 forex pairs and dozens of indices, including the German DAX. This broker also allows for cryptocurrency trading within its platform.

eToro DAX

Another feature of this broker is its social trading network, which allows you to share trade ideas and learn from investors around the world. Investors can also make use of eToro’s premade portfolio selection that groups together performing assets within different investing themes.

eToro MarketCopy Portfolios

eToro is regulated by the FCA, ASIC and CySEC. In addition, all UK accounts are protected by the FSCS, meaning that you are insured for up to £85,000 if anything happens to eToro.

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Research DAX Investment

Before you jump into investing in the DAX, it’s important to understand what it is. We’ll cover everything you need to know and highlight some strategies you can use to make money from investing in the DAX.

What is the DAX Index?

The DAX index tracks the value of 30 of the largest companies by market cap that trade on the Frankfurt Stock Exchange in Germany.

The index is dominated by giant German corporations like Volkswagen, Daimler, Allianz, Bayer, Deutsche Bank, Siemens and BMW. Because of this, the DAX is much more oriented toward traditional and so-called “old economy” sectors like car manufacturing, aviation and heavy industry. In that sense, it’s very different from the US stock indices like the S&P 500 and the Nasdaq, which are more technology heavy.

The DAX is very popular to trade, and as a result is highly liquid with tight spreads and long trading hours.

For any investors looking to have exposure to the fifth largest economy in the world and the largest one in the European Union, the DAX is a place to start. The index may only cover 30 companies, but it represents a huge swath of the German economy.

Another reason to invest in the DAX is to achieve diversification. If you are heavily invested in tech stocks through the S&P 500 and the Nasdaq indices in the US, the German DAX gives you exposure to automakers, heavy industrial companies, and financial stocks.

It’s also worth pointing out that Germany’s economy is in the midst of a transformation. European stocks are increasingly moving towards the tech sector, particularly after the COVID-19 pandemic. The DAX stands to be one of the major beneficiaries in the EU market in the years to come.

FAQs

What time does DAX open?

Ilija Rajakovic author check sign Pro Investor

Ilija Rajakovic is a Serbian-based investor and writer. His main focus areas include finance, trading, and macroeconomy. Ilija holds a Master’s Degree in Investment Banking and is pursuing his Ph.D. with a focus on sustainable finance and development. He is actively managing personal investment portfolios and advising private clients. And has run a website which generated actionable stock market ideas and provided insights into global economic landscape in the past. His economic articles have been publshed in highly respected magazines like NIN and Magazin Biznis.

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