Global X DAX Germany ETF

DAX

Market cap $282M

The Global X DAX Germany ETF is the only US-listed ETF offering pure-play exposure to Germany's prime equity benchmark- the DAX. DAX isn't as popular as EWG, which covers the MSCI Germany Index, but it is more cost-efficient, has a better income profile, and has a superior track record of risk-adjusted returns. Valuations for DAX have re-rated to a 6-10% premium over developed markets and European stocks, while its yield is roughly only half as much as these other pockets.

Germany's export-driven economy faces severe headwinds from US tariffs, euro appreciation, and lost access to cheap Russian energy. German trade surpluses are shrinking, with 2025 exports to the US projected down 7% and overall trade surplus far below 2024 levels.

Germany is on course for the highest corporate insolvency count in more than a decade, raising fresh questions about the resilience of the nation's largest listed companies — and the ETFs that track them.

The Global X DAX Germany ETF is overweight in cyclical sectors such as industrials, financials, materials, and consumer discretionary. After several years of lackluster growth, German GDP should finally rebound in 2026, boosting earnings at cyclical firms. Coupled with a high 0.70x retention ratio, this should allow for solid dividend growth as long as downside risks do not materialize.

Tony Coniaris, Oakmark co-CIO of international equities, joins 'Squawk on the Street' to discuss the role international equities play in diversification, the performance gap between the U.S. and abroad and much more.

After more than a decade of lackluster performance, established international and emerging markets are growing in popularity. What's driving this, and what could derail this investor enthusiasm?

I maintain a buy rating on the DAX ETF, citing its attractive valuation and solid long-term uptrend, despite recent momentum loss. DAX offers efficient, diversified exposure to Germany's largest companies, with a low expense ratio and a notable P/E discount to the S&P 500. The ETF is concentrated in top holdings and cyclical sectors, so performance hinges on these stocks, especially during earnings season.

Optimism over a US-EU trade deal and strong bank earnings lift the DAX, but ECB caution and trade risks keep the forecast mixed.

German Chancellor Friedrich Merz predicts GDP growth next year after three stagnant years. His approval rating is up, and so are the markets.

Goldman Sachs Bank Europe CEO Wolfgang Fink discusses the German economy and investor sentiment on the sidelines of the Goldman Sachs European Financials Conference in Berlin.