Securities from Germany often have the reputation of not being able to keep up with their competitors from the USA - and wrongly so! German equities offer many interesting opportunities for day traders, investors and dividend hunters. We show when and how German stocks are worthwhile and what you should bear in mind when trading.
The most important in a nutshell
- Numerous German shares are waiting for investors and offer different opportunities and risks
- Although the DAX benchmark index can only keep up with heavyweights such as the S&P500 to a limited extent, an investment in German equities is worthwhile
- The German economy has a distinct life of its own and can offer exciting opportunities for active traders
- Access to the stock exchanges, tax issues and the like are easier to master in a "home game"
German shares in comparison
When people talk about equity investments, they usually think first of companies such as Apple, Amazon, Microsoft or Tesla. These US companies are among the wertvollsten Unternehmen by market capitalization and are extremely popular with investors. But the domestic market is not sleeping either: German equities offer a number of global companies as well as "hidden champions".
Many of them shine with attractive price gains, pay a reliable High dividend or convince with outstanding crisis resistance. Of course, not all that glitters is gold here either: an investment in German stocks requires careful consideration, as losses or even complete bankruptcies can occur here - as is always the case on the stock markets.
This is because there are currently only around 450 companies listed on the stock exchange in Germany. In comparison: before the start of the financial crisis in 2007, there were still 761 companies! So there is a lot of movement on the German stock exchanges.
Active retailers who, for example Shares for day trading must discover the appropriate positions as usual (for example via Newstrading) and a long position or a Short sale carry out. German equities therefore behave no differently from US stocks, other EU states, the United Kingdom, Japan, China or all other nations.
CapTrader can do that:
Trading securities from other nations is usually an expensive and very limited endeavor - not with CapTrader! We offer access to more than 150 stock exchanges in 33 nations at consistently favorable conditions!
However, there may be differences due to the "home advantage", as you probably know German companies better and can obtain information more easily. Attending a shareholders' meeting, such as the Porsche Annual General Meetingis also easier to accomplish if it takes place in Germany.
Simpler taxes?
German tax law is considered to be one of the most complex and extensive in the world. Further complications can arise when trading in securities from abroad. For example Dividends initially taxed in the respective country be This is followed by the final withholding tax of 25 percent plus solidarity surcharge and, if applicable, church tax in Germany.
Double taxation agreements exist between many countries to avoid this double tax burden. They make it possible to reclaim taxes that have been paid in excess. Depending on the country, this is a complex and extremely lengthy process.
At German shares do not have this problem! Only the final withholding tax is due here, which simplifies the entire process. The amount to be paid can also be reduced further: you can have your personal income tax rate applied through a "favorable tax assessment" if this is lower than the final withholding tax.
Even more effective is the Use of a foreign broker such as CapTraderas they do not pay the tax automatically. Instead, you must declare your winnings in your tax return and pay the tax later. A Time advantage that can increase your return enormouslythat the respective amounts are available for transactions for much longer!
CapTrader can do that:
CapTrader is a German company with German-speaking customer service, but is legally considered a broker based abroad. This means that we do not have to deduct taxes from your profits, but you declare them in your tax return. This results in a significant financial advantage that can greatly increase your returns!
The German indices
As is also customary in other nations German shares in various indices summarized. These groupings follow certain rules and sort the companies according to industry, market capitalization or trading venue, for example.
The best-known representative is undoubtedly the German share index DAX. It includes the 40 (before November 2020: 30) largest listed companies from Germany by market capitalization. Due to its small size, the index has a narrow base and does not always accurately reflect developments in the German economy.
However, the small number and restriction to high-caliber companies makes the DAX Particularly attractive from an investor's point of view and can provide lucrative returns. It is a total price index that does not simply add up the prices of the securities it contains!
Dividendsinterest, rights offerings and other distributions are also included. This means that the DAX roughly corresponds to the Dow Jones Industrial Average from the USA. The better known S&P 500 on the other hand, is a pure price index.
Would you like to know more about the US indices? Our article "Die wichtigsten US-Indizes im Überblick" contains all the information.
The "DAX family" also includes other indices, each of which tracks specific stocks:
| Designation | Included titles |
| DAXK | Same stocks as in the DAX, but calculated without taking dividends into account |
| MDAX | The "Mid Cap DAX" contains the 50 largest German companies by market capitalization and trading volume that follow the DAX, i.e. positions 41 to 90 on the list of the largest companies |
| SDAX | The "Small Cap DAX" contains the 70 largest companies that follow the MDAX, i.e. positions 91 to 160 on the list of the largest companies |
| TecDAX | Contains the 30 largest technology companies from Germany by market capitalization and trading volume. Originally an independent index, the companies have also been included in the DAX, MDAX and SDAX since 2018. The TecDAX continues as a parallel index. |
| HDAX | Consists of DAX, MDAX and TecDAX. As companies can be included in both the DAX/MDAX and the TecDAX at the same time, the exact number of shares can fluctuate. The HDAX is the successor to the DAX100 |
| CDAX | The CDAX contains all German shares listed on the Frankfurt Stock Exchange and General Standard and Prime Standard. Around 360 securities are currently included |
| VDAX-NEW | Trade options is a popular way of hedging against falling prices or profiting from movements. The VDAX-NEW measures the number of "at-the-money" and "out-of-the-money" options on the DAX and thus the implied volatility. It thus provides an insight into the sentiment of market participants and serves as an underlying value for derivatives. It is the counterpart to the VIX of the US S&P 500 index. |
| ShortDAX | The ShortDAX tracks the price development of the DAX in inverse proportion, i.e. if the price of the DAX falls by 1 %, the ShortDAX rises by 1 %. This means that market participants whose broker does not have a Short sale allows investors to profit from a falling market. |
If you are not convinced of the future performance of a German share or index, you can still profit: High-quality brokers such as CapTrader offer you the opportunity tothrough flexible short positions (Short sale), options and other derivatives to benefit from falling prices.
CapTrader can do that:
CapTrader's wide range of products includes options, futures and warrants as well as margin trading with shares and other assets. You can therefore profit from both rising and falling prices in a variety of ways!
Best securities: Attractive German equities for different strategies
Securities from Germany tend to be neglected by many investors and traders. For example, the DAX in reputation, less profitable to be than the US S&P 500 index, for example. In fact, the average return is lower over longer periods of time.
In addition the German index shows considerable fluctuations - significantly more than many other indices. One of the reasons for this is the rather small number of companies included.
For long-term investors, a Investment in the entire DAX, for example via ETFsThis is quite conceivable, but other indices can offer more here. Active traders, on the other hand, who use equity indices and Shares for day trading can The German benchmark index and its pronounced upward and downward movements achieved very good results.
Investors looking for individual shares will also find what they are looking for in Germany! German equities include many interesting stocks: Aktien mit hoher Dividendestrong growth, high volatility or particular crisis resistance are available.
In the following we have has selected some exciting German shares for you as examples. Please note that this is not investment advice! We do not recommend or advise against investing in the stocks presented. The list merely serves to illustrate various aspects of the stock market.
1. for dividend hunters: Volkswagen, Mercedes-Benz Group or BASF?
German equities, especially the heavyweights of the DAX, hold some Stock with excellent dividend yield ready! Anyone who wants to generate additional cash flow through profit distributions or even build up an entire dividend portfolio will quickly find what they are looking for here.
In this category, two car manufacturers in particular, the Mercedes-Benz Group and Volkswagen, stand out. They offer a dividend yield of over eight percent at the time of writing!
Mercedes has become an integral part of the international car market with its premium vehicles. However, the long-established company is finding it difficult to switch to electric drives and the competition is strong. Moreover, forecasts in this volatile industry are considered difficult anyway.
Price falls are therefore a distinct possibility - alongside the suspension or reduction of dividends, they are the main concern of investors in dividend shares. Such price falls can quickly consume the income from profit distributions.
Anyone who is convinced of the company in the long term can use the securities to secure a High-dividend German share into the portfolio. With a recent payout ratio of around 43%, payouts still appear to be secure. Increases are also possible without any problems.
Also Volkswagen stands out as Car manufacturer with high dividend This means that investors can expect around one euro per share per year, which - depending on the share price - corresponds to a dividend yield of around eight percent.
Fluctuations are also not unusual: after the end of the COVID crisis, investors were able to triple their capital in a short space of time! Since then, however, prices have fallen sharply again and are now even below the crisis-related initial value.
For dividend hunters, however, the low payout ratio: Volkswagen is currently only distributing around a third of its profits to investors. Further increases are therefore conceivable here.
The situation is quite different with BASF another German share, which at first glance appears to have high dividend yield can attract: around 7.5 percent per year can be expected here! The However, the payout ratio is over 100 percent! This means that more is paid out to investors than the company generates through its profits.
This is not a sustainable situation in the long term and a clear warning sign. The stagnation of the dividend (no increase last year) and the mixed views of analysts are also cause for concern. Overall, it seems BASF is therefore not the best German share for investors who want a secure dividend.
2. share price increases: SUSS, Ionos, Rheinmetall
Among German equities, there are numerous stocks that have a tremendous growth are showing. They offer ideal opportunities for long positions and are therefore ideal for newcomers and long-term investors.
Strong price gains are naturally very pleasing for investors who own the corresponding securities. However, too rapid growth can be associated with considerable risks, especially if the prices on the stock markets do not correspond to the real value of the company.
The The following three companies have stood out in recent weeks due to their massive growth. Potential investors have to decide for themselves whether the high share prices have only arisen on the trading floor or are justified by economic performance.
The Munich-based company SUSS MicroTec SE offers production systems and related services for the semiconductor and nanotechnology sector. The current artificial intelligence boom, which is reflected for example in the popularity of AI trading fueled the business - and the interest of investors!
The The price of a share has increased almost eightfold in the last five years! In the particularly "hot phase" of the AI boom, which began in 2024 at the latest, a Tripling within six months. However, as with all stock market transactions, past profits are no guarantee of future performance.
The Ionos Group is probably still known to many as "1&1" from the early days of the Internet. Since then, the Internet services have been outsourced to a separate subcontractor and the company has concentrated entirely on Hosting and cloud computing. This hit a nerve, as the demand for decentralized computing and storage power has literally exploded in recent years.
For Ionos, this has led to a Share price growth of around 130 percent in the past 12 months led. According to the analysts, the outlook remains positive.
Weapon manufacturer Rheinmetall benefited from the Russian attack on Ukraine and the subsequent drastic increase in demand. Prices jumped from one high to the next and were able to fivefold in around two years.
Investors who have no moral qualms can add the German share Rheinmetall to their portfolio and hope for further growth. However, there is no guarantee of further gains - the peak may already have been reached. However, analysts' opinions are predominantly positive.
3. low volatility: Osram, Beiersdorf and Telekom
Securities with low volatility are considered boring and unprofitable by many investors, as they show below-average growth during market peaks. They suffer less from price slumps even in times of crisis. Overall, this makes for an attractive investment class that brings stability and good average yields to your own portfolio.
Traditionally Non-cyclical consumer goods as Prime examples of stable securities. Because even in times of crisis, people eat, drink, shower and brush their teeth. The company, for example, benefits from this Beiersdorf with its brands Nivea, Labello and Eucerin.
The effect of the COVID crisis 2020While other sectors have lost more than half of their value in some cases, Beiersdorf defied the slump. Coupled with otherwise attractive growth, this creates an attractive German share for long-term investments
Also the OSRAM Licht AG last recorded price fluctuations and develops very evenly with a volatility of around seven percent. The price of a share has been at 50 euros for almost four years now. However, investors have not only gained a stable investment in their portfolio, but have also made a Annual dividend of around 4.5 percent deserved!
Telecommunications is also largely resistant to crises, because even during a pandemic or financial crisis phone calls, surfing or working online. Deutsche Telekom is benefiting from this and is experiencing largely continuous share price growth. In addition to crisis-proof growth, investors can also look forward to a dividend of around three percent.
Conclusion: German equities better than their reputation
German shares are particularly attractive for investors from Germany: not only do they know the companies well, they also don't have to worry about double taxation of dividends!
Who wants a Brokers like CapTrader with a custody account abroad can also delay the payment of withholding tax until the next tax return. The capital is thus available for longer and can be Further yield generate.
In addition, German equities offer a broad spectrum that is suitable for a wide range of strategies. Stocks such as Volkswagen and Mercedes-Benz shine with a high dividendSÜSS or Ionos recently showed Strong share price growth and with Osram or Beiersdorf are Stable, non-cyclical securities available.
Nevertheless, German equities only plays a subordinate role for many investors. Indices such as the DAX, MDAX or TecDAX simply cannot keep up with the performance of other products. Who, for example The most important US indices at a glance quickly sees that, for example, the S&P significantly higher return here generated.
As a result, German equities have the reputation of not being among the most lucrative securities. In fact, however, a A look at individual stocks shows that German shares can easily keep up with the most attractive stocks from around the world. The somewhat weaker performance of the DAX and Co. does not allow any conclusions to be drawn about individual companies.
