Majority of DAX Shares Owned by Foreign Investors - Majority of DAX shares owned by international investors
In the financial landscape of Germany, a notable shift has occurred in the ownership of DAX stocks. According to Henrik Ahlers, CEO of EY, foreign participation in Germany's top companies has increased significantly, proving their continued great attractiveness.
This increase in foreign ownership, particularly the rise in North American ownership compared to European ownership, can be attributed to several key factors. The majority of DAX companies are now owned by foreign investors, with North American investors increasing their stake significantly since 2010—from 17.1% to 25.4%.
One reason for this trend is the growing attractiveness of German companies to foreign investors. The innovative strength and global positioning of DAX-listed firms have caught the attention of global investors, who view these companies as attractive investment opportunities.
Another factor is the global orientation of many DAX firms. With Germany being just one market among many, these companies appeal to international investors who contribute knowledge and technology, enhancing innovation and competitiveness. This global exposure aligns well with the interests of North American institutional investors seeking diversified and influential companies.
The flow of dividends also reinforces foreign ownership. Around half of DAX dividends flow abroad, indicating substantial foreign participation and economic incentives for maintaining or increasing foreign stakes.
However, the share of European investors in DAX companies has decreased from 25.7% to 22.9% since 2010. This decrease is due, in part, to the inflows from North America and changing investor preferences.
The situation has continued to shift towards foreign ownership of DAX stocks. The share of DAX stocks held by domestic investors decreased by 0.7 percentage points compared to the previous year. Among companies with data available since 2010, the domestic share has decreased by 2.1 percentage points.
Despite this outflow of dividends, Ahlers does not view it as a problem. Foreign investors receive dividends from German companies, and German investors can benefit from dividend distributions from foreign companies. Ahlers notes that German shareholders can choose to engage more strongly in DAX companies and participate in their dividend distributions, but the stock culture in Germany is still relatively weak.
In summary, the rise in North American ownership of DAX stocks is mainly driven by the enhanced global appeal, strong innovation, and market positioning of German companies, coupled with growing confidence and investment flows from the US. Meanwhile, European ownership has decreased moderately due to these inflows and changing investor preferences.
Investors from North America have been increasingly investing in DAX shares, with their stake rising from 17.1% to 25.4% since 2010, a shift largely driven by the attractive nature and global positioning of German companies. Finance professionals like Henry Ahlers attribute this trend to the innovative strength and global appeal of DAX-listed firms, which have caught the attention of international investors.
