GEX – German Entrepreneurial Index

Small and medium-sized companies contribute a great deal to the German economy. They generate around half of the Gross Domestic Product and make almost half of all investments. In order to finance their entrepreneurial ideas they need equity capital.
Selling shares in their companies via the exchange is one source of capital.

How do exchange-listed small to medium-sized companies perform? Although companies with a lower market capitalization from various sectors are included in the existing selection indices – MDAX®, SDAX® and TecDAX® – a specific selection criterion with relevance for small to medium-sized companies was been missing up until now.

The GEX® index defines the criterion of a founder or owner-dominated company with relevance for an index. Deutsche Börse’s GEX® is a new indicator for the price development of small to medium-sized companies on the exchange.

Medium-sized, owner-dominated companies – so-called “entrepreneurial firms“ – are characterized by two main features:

• They are dominated by their owners. The company management also represents the main shareholder(s) in the company. This is why in GEX companies members of the executive or supervisory board or their families must own 25 to 75 percent of all shares. The upper limit of 75 guarantees that the companies are traded on the exchange at all.
• They are in a growth phase. These companies went public – even if they are well-established firms – no longer than ten years ago.

Related Links

• Data Sheet: GEX Performance Index (ISIN DE000A0AER17)
• “Better performance in the long term, if member of the management are also major shareholders“
• Guide German Entrepreneurial Index at dax-indices.com (pdf)