What is France's CAC 40 Index?

A Look at France's Version of the Dow Jones

Stock exchange building, Paris, France
••• Thomas Craig/Photolibrary/Getty Images

The CAC 40 is the most popular benchmark stock market index in France, similar to the Dow Jones Industrial Average in the United States, consisting of the 40 largest equities by market capitalization and liquidity. While the CAC 40 consists almost exclusively of French companies, their multinational reach makes it one of the most popular European index for foreign investors.

The CAC 40 launched on December 31, 1987 with a base value of 1,000.

After reaching an all-time high of nearly 7,000 during the dot-com boom in 2000, the index fell to around 3,000 during the economic crisis in 2011 before recovering to upwards of 5,000 in 2017 and 2018.

Several other indices, including the CAC Next 20 and the CAC Mid 60, have been introduced alongside the CAC 40 and gained popularity among domestic and international investors.

What Companies are in the CAC 40?

The composition of the CAC 40 index is reviewed each quarter by an independent committee known as the Conseil Scientifique, which ranks the top companies listed on the Euronext Paris by market capitalization and share turnover over the past year. From the top 100 companies, the committee chooses forty companies that are the most relevant benchmark for portfolio management and suitable underlying assets for derivative products.

The most recognizable components of the CAC 40 include:

  • Total SA (EPA: FP) (NYSE: TOT) – Total SA is a France-based integrated international oil and gas company with operations in more than 130 countries.
  • Sanofi (EPA: SAN) (NYSE: SNY) – Sanofi SA is a France-based global and diversified healthcare company with 55 projects in its diverse clinical development portfolio.
  • BNP Paribas SA (EPA: BNP) – BNP Paribas is a France-based bank group focused on retail, investment and corporate banking operations around the world.
  • France Telecom (EPA: FTE) (NYSE: FTE) – France Telecom SA is a France-based telecommunications operator focused on fixed and mobile communications.
  • Societe Generale (EPA: GLE) (OTC: SCGLY) – Societe Generale SA is a France-based banking group with operations in 85 different countries.
  • ArcelorMittal (EPA: MT) (NYSE: MT) – ArcelorMittal SA is a France-based global steel producer with steel shipments of approximately 85 million tons and production of 90.6 million tons.

International investors can find the current list of CAC40 components on the Euronext website.

How to Invest in France’s CAC 40

International investors seeking direct exposure to the CAC 40 can do so using any number of exchange-traded funds (ETFs) trading on the NYSE Euronext Paris. Of course, investors can also purchase individual components of the index using American Depository Receipts (ADRs) or by purchasing foreign stock directly on the Euronext Paris exchange.

Here are five of the most popular CAC 40 ETFs:

  • Lyxor CAC 40 ETF (EPA: CAC)
  • Amundi CAC 40 ETF (EPA: C40)
  • EasyETF CAC 40 ETF (EPA: E40)
  • DBXT CAC 40 ETF (EPA: X40)
  • HSBC CAC 40 ETF (EPA: K40)

International investors should carefully consider tax implications, currency risks, and other risk factors when purchasing foreign stock directly on the Euronext Paris exchange.

When purchasing ADRs, it's also important to consider liquidity risks compared to the EU-listed security. 

Alternatives to France's CAC 40

International investors interested in alternatives to French-listed CAC 40 ETFs have several options. The easiest and most direct way to invest is with the iShares MSCI France Index ETF (NYSE: EWQ), but there are also many other ETFs and mutual funds with exposure to French securities. These funds provide diversified exposure without the time and cost of building a portfolio from individual foreign stocks or ADRs or the need to purchase ETFs on foreign exchanges.

Here are three popular European ETFs with French exposure:

  • MSCI European ETF (NYSE: VGK)
  • iShares S&P Europe 350 Index Fund (NYSE: IEV)
  • SPDR DJ Euro STOXX 50 ETF (NYSE: FEZ)

When considering these ETFs, international investors should look at the expense ratio and risk factors related to sector concentration.

Investors should generally seek out the lowest cost passively-managed funds to maximize their long-term risk-adjusted returns.

CAC 40 Resources

International investors looking for additional information about the CAC40 index or French ETFs and mutual funds providing similar exposure may want to check out the resources below.