What is France's CAC 40 Index?

A Look at France's Version of the Dow Jones

Stock exchange building, Paris, France
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The CAC 40 is France’s benchmark stock market index, similar to the Dow Jones Industrial Average in the United States. The index is comprised of 40 largest equities listed in France, measured market capitalization and liquidity. While the CAC 40 consists almost exclusively of French-domiciled companies, their multinational reach makes it the most popular European exchange for foreign investors.

The CAC 40 first began 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 in more recent years to around 3,000 during the economic crisis in 2011. Several other indices, including the CAC Next 20 and the CAC Mid 60, have been introduced alongside the CAC 40 and gained popularity among investors.

What Companies are in the CAC 40?

The CAC 40 is the most widely-used benchmark for the Paris market, consisting of the 40 largest equities listed in France by market capitalization and liquidity. These equities are subject to review every quarter by an independent committee that may add or remove any components. Meanwhile, no individual component is allowed to have a weight greater than 15% of the total index value.

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.

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. While some of these components trade as American Depository Receipts (ADRs) in the United States, many only trade domestically on the NYSE 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)

Some Alternatives to France's CAC 40

Investors interested in alternatives to the CAC 40 have several options. The most direct way to invest is with the iShares MSCI France Index ETF (NYSE: EWQ), but there are also many other funds with French exposure.

Some French companies that are not listed on the CAC 40 index also trade as ADRs on U.S. stock exchanges and may be good candidates for investment.

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)

Useful CAC 40 Resources