SDAX
The SDAX is a stock market index comprising 70 small-cap companies listed in the Prime Standard segment of the Frankfurter Wertpapierbörse (FWB®), which rank immediately below the MDAX® in terms of free float market capitalization and liquidity.[1] Launched on June 21, 1999, by Deutsche Börse, it provides a benchmark for the performance of smaller German equities in traditional sectors, excluding technology-focused firms covered by the TecDAX®.[1][2] As part of the broader DAX® equity index family managed by STOXX Ltd. (a subsidiary of Deutsche Börse Group), the SDAX is calculated as a performance index, which reinvests dividends to reflect total returns, with a base value of 1,000 points set on December 30, 1987.[1] It is free-float market capitalization-weighted, with individual components capped at 15% to ensure diversification, and updated in real-time every 60 seconds during Xetra® trading hours from 9:00 to 17:30 CET.[1] The index composition is reviewed quarterly in March, June, September, and December, based on criteria including a minimum 10% free float, German or EU/EFTA headquarters, audited financial reporting, and sufficient liquidity (such as an order book volume of at least €1 billion or 20% of trading turnover on the Frankfurt exchange).[1][3] its component count was adjusted from 50 to 70 in 2018 to better represent the market segment.[4] Since inception, it has delivered an average annual return of approximately 10% as of June 2024, underscoring its role in capturing growth opportunities in underrepresented sectors like industrials, consumer goods, and financials.[5] Investors use the SDAX for benchmarking portfolios, derivatives trading (e.g., futures and options on Eurex), and exchange-traded products, complementing larger indices like the DAX® (40 blue-chip firms) and MDAX® (50 mid-caps).[1][2]History
Launch and Early Development
The SDAX index was launched on June 21, 1999, by Deutsche Börse AG as a benchmark to track the performance of small-cap companies in the German equity market.[6] Designed to complement larger indices like the DAX, it provided investors with exposure to smaller enterprises outside the blue-chip segment.[5] At inception, the index comprised 100 stocks selected from the regulated market of the Frankfurt Stock Exchange, excluding constituents of the DAX and MDAX, based on criteria such as market capitalization and liquidity measured by order book volume.[7] As a performance index, the SDAX was structured to reflect total returns, incorporating both price appreciation and reinvested dividends from its small and medium-sized constituents.[8] This approach aimed to offer a comprehensive view of investment outcomes in the small-cap segment, which often represents innovative and growth-oriented firms in traditional sectors. The index family, including the DAX for large caps and MDAX for mid caps, collectively covered a broad spectrum of the German market.[5] To establish a historical baseline, the SDAX was backtested from a base date of December 30, 1987, with an initial value of 1,000 points; by the launch date, the hypothetical level reached 2,851.48 points, demonstrating simulated growth over the prior period.[6] This backtesting methodology allowed for performance comparisons predating the official start, highlighting the segment's potential despite market volatility in the late 1980s and 1990s. Early development focused on refining selection rules to ensure representation of liquid small caps, setting the foundation for its role in portfolio diversification.[1]Key Milestones and Changes
In 2002, the number of components was reduced from 100 to 50 to refine the focus on the most liquid small-cap stocks.[7] In September 2018, as part of a comprehensive overhaul of the DAX index family, the SDAX was expanded from 50 to 70 constituents to enhance its representation of the broader small-cap segment on the Frankfurt Stock Exchange.[9] This change aimed to capture greater diversity among smaller German companies while maintaining focus on those ranked below the MDAX in terms of free-float market capitalization.[10] To improve the index's adaptability to market dynamics, Fast Entry and Fast Exit rules were introduced effective September 5, 2016, enabling quarterly reviews for significant ranking shifts beyond the semi-annual full adjustments.[10] These rules allow for the swift inclusion or exclusion of companies based on updated free-float market cap and liquidity metrics, ensuring the SDAX remains reflective of evolving small-cap performance without waiting for regular reviews.[11] By 2018, these mechanisms were fully integrated into the quarterly process alongside the index's expansion.[5] The 2008 global financial crisis introduced substantial volatility to the SDAX, prompting methodological adjustments to stabilize composition amid sharp declines in small-cap valuations. On December 22, 2008, the minimum free-float threshold for index eligibility was raised from 5% to 10%, alongside new provisions for extraordinary adjustments to free-float factors during corporate actions, to better account for liquidity disruptions and enhance rebalancing accuracy.[10] These updates helped mitigate temporary distortions in the index during the period of heightened market stress. In the 2010s, the SDAX aligned its free-float calculations with evolving EU benchmark standards, including clarifications under Regulation (EU) 2016/1011 to ensure transparency and reliability in index construction.[10] This involved refined rules for determining investable shares, supporting consistent quarterly rebalancing and compliance with broader European financial reporting directives.[10]Composition
Selection Criteria
The SDAX index comprises small-cap companies that rank below those in the MDAX within the broader Deutsche Börse index family, where the DAX represents the top 40 blue-chip firms and the MDAX covers the next 50 mid-cap stocks based on free-float market capitalization.[12] To be eligible for inclusion in the SDAX, companies must meet stringent basic criteria outlined in the DAX Equity Index Methodology Guide. Primarily, they must be listed in the Prime Standard segment of the Frankfurt Stock Exchange's Regulated Market, ensuring high transparency and international visibility through compliance with International Financial Reporting Standards (IFRS) and ad hoc publicity requirements. Additionally, shares must exhibit continuous trading on the Xetra electronic trading system, maintain a minimum free float of 10% to promote liquidity, and have their registered office in the European Union or European Free Trade Association (EU/EFTA) or their principal place of business in Germany. Companies are also required to publish audited annual financial reports within four months of the fiscal year-end (with possible extensions), half-yearly reports within three months, and quarterly statements within 75 days, all in accordance with the German Securities Trading Act (WpHG).[13][5] The selection process ranks eligible companies based on their average free-float market capitalization, calculated using a 20-trading-day volume-weighted average price (VWAP) adjustment to reflect recent market conditions. This ranking positions the SDAX to include the 70 companies immediately following the MDAX in the overall hierarchy, specifically those in ranks 91 through 160 among all qualifying German equities. Free-float market capitalization is determined by multiplying the free-float factor (representing the proportion of shares available to the public, excluding stakes of 5% or more held by controlling or strategic investors) by the full market capitalization.[13][12] Certain securities are explicitly excluded from consideration to maintain the index's focus on viable, liquid common stocks of operating companies. American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs), preference shares without voting rights, and investment trusts are ineligible, as are companies in the Finance, Insurance, or Real Estate (FIRE) supersector or those undergoing insolvency proceedings or having had their exchange admission revoked. Furthermore, only ordinary shares are permitted, ensuring the index tracks entities with standard equity structures.[13] Liquidity is a core requirement to ensure tradability and market depth. For initial eligibility, companies must demonstrate a minimum order book volume of €1 billion over the preceding 12 months or a turnover ratio of at least 20%. For ongoing inclusion, the threshold adjusts to a minimum order book volume of €800 million or a 10% turnover ratio over the same period, preventing illiquid stocks from distorting index performance. These metrics are derived from Xetra trading data to prioritize actively traded securities.[13] Eligibility is assessed quarterly to reflect evolving market dynamics, with reviews conducted in March, June, September, and December. The cutoff for data is the last trading day of the preceding month—specifically, the end of February, May, August, and November—allowing for timely updates with announcements made early in the review month and changes effective on the rebalancing date (typically the third Monday). This process incorporates fast entry and exit rules for significant ranking shifts, ensuring the SDAX remains representative of the small-cap segment.[13][12]Current Constituents
The SDAX index comprises 70 small-cap companies, all based in Germany and listed in the Prime Standard segment of the Frankfurt Stock Exchange, providing broad exposure to the domestic small-cap equity market. As of October 31, 2025, the aggregate free-float market capitalization of these constituents stands at €37.6 billion, with individual free-float market caps ranging from €0.2 billion to €1.4 billion and an average of €0.5 billion, emphasizing firms below the size threshold of the MDAX.[8] This structure covers a significant portion of the German small-cap universe, focusing on companies with sufficient liquidity and free-float to ensure investability. The current constituents exhibit sectoral diversity, with technology comprising approximately 20.6% of the index, industrial goods and services 17%, healthcare 10.8%, automobiles and parts 7.2%, and financial services 6.9%; the balance includes allocations to consumer discretionary (around 11%), materials (about 4%), communication services (roughly 6%), consumer staples (near 5%), real estate (about 4.5%), and utilities/others (under 1%).[8] These weights are determined by free-float market capitalization, subject to a 15% cap per company to promote diversification. The index's composition underwent a notable adjustment in October 2025, when Ceconomy AG was removed due to a breach of the free float criterion following a takeover, replaced by Medios AG to maintain the 70-company count.[14]| Company Name | Sector | Brief Industry Description |
|---|---|---|
| Schaeffler AG | Automobiles and Parts | Global supplier of automotive bearings, chassis systems, and powertrain components. |
| Deutz AG | Industrial Goods and Services | Producer of diesel and gas engines for off-highway vehicles and machinery. |
| AlzChem Group AG | Materials | Manufacturer of specialty chemicals for pharmaceuticals, agriculture, and polymers. |
| Siltronic AG | Technology | Supplier of silicon wafers for semiconductor production. |
| Südzucker AG | Consumer Staples | Leading European producer of sugar, bioethanol, and functional food ingredients. |
| ProSiebenSat.1 Media SE | Communication Services | Operator of free-to-air TV channels, digital entertainment, and dating platforms. |
| Kontron AG | Technology | Provider of embedded computing solutions for IoT, automation, and transport. |
| Kloeckner & Co. SE | Industrials | Steel distributor and processor serving construction and automotive sectors. |
| Drägerwerk AG & Co. KGaA | Healthcare | Developer of medical devices, ventilators, and safety equipment for emergency services. |
| Encavis AG | Utilities | Investor and operator of onshore and offshore wind and solar parks across Europe. |