When it officially launched in 1988, it coincidentally was registered at an all-time low. An all-time high was recorded in September 2000. But what about the CAC 40 index now, and is it worth investing in? Let’s explore what purposes this index serves, how it’s calculated, and what trading strategies can yield good profits.
What Is the CAC 40 Index?
A stock market index is a statistical composite that measures the collective performance of a selected group of shares, weighting each company — typically by market capitalisation — to produce a single benchmark figure. The CAC 40 is France’s primary example of such a benchmark.
The CAC 40 is a free-float capitalisation-weighted index. It quotes 40 of the largest and most actively traded shares in France and is considered a measure of the economy and the Paris stock market. It’s similar to what Dow Jones represents for the United States, FTSE 100 is for the UK, Nikkei 225 is for Japan, etc.
Originally, the acronym CAC meant Compagnie des Agents de Change. It was a group of brokers that operated the Paris Stock Exchange since at least the 16th century. The initial sentiment was transformed, but the acronym stayed.
Cotation Assistée en Continu was introduced in 1988 as a technological modernisation of the Paris Bourse, moving from the manual agent-based trading of the Compagnie des Agents de Change system to computerised quotation. The index was benchmarked from 31 December 1987 with a base value of 1,000 points, establishing the starting reference against which all subsequent performance is measured.
Companies within the CAC 40 composition account for about 20% of market capitalisation in Europe, which shows how influential it is. It’s also tightly connected to the Euro Stoxx 50 index, where they have 15 companies in common. CAC often catches the attention of international investors, with almost half of CAC 40 shares held by non-residents and a quarter owned by investors outside of the Eurozone.
Euronext is a pan-European exchange group operating regulated markets in France, the Netherlands, Belgium, Ireland, Norway, Portugal, and Italy (following its 2014 spin-off from NYSE Euronext). Euronext Paris is the French subsidiary and the mandatory listing venue that determines CAC 40 eligibility. Only companies using Euronext Paris as their market of reference can be assessed for inclusion in the index.
CAC 40 in the Global Index Landscape
Every major economy maintains a flagship equity benchmark that investors use to gauge overall market health. The CAC 40 serves this role for France in the same way that comparable indices serve other nations.
| Index | Country | Exchange | Constituents | Weighting Method |
|---|---|---|---|---|
| CAC 40 | France | Euronext Paris | 40 | Free-float cap-weighted |
| FTSE 100 | UK | London Stock Exchange | 100 | Free-float cap-weighted |
| FTSE 250 | UK | London Stock Exchange | 250 (mid-cap, 101–350) | Free-float cap-weighted |
| Dow Jones | US | NYSE | 30 | Price-weighted |
| Nikkei 225 | Japan | Tokyo Stock Exchange | 225 | Price-weighted |
| EURO STOXX 50 | Eurozone | Multi-exchange | 50 | Free-float cap-weighted |
| AEX | Netherlands | Euronext Amsterdam | 25 | Free-float cap-weighted |
| Hang Seng | Hong Kong | HKEX | ~80 | Free-float cap-weighted |
| Nasdaq | US | Nasdaq | 3,000+ | Cap-weighted (tech-heavy) |
| ISEQ 20 | Ireland | Euronext Dublin | 20 | Free-float cap-weighted |
The CAC 40 shares its exchange infrastructure with several other national benchmarks under the Euronext group umbrella. The AEX covers the 25 largest companies on Euronext Amsterdam and serves as the Dutch national benchmark, while the ISEQ 20 tracks the 20 largest companies listed on Euronext Dublin. Together, these indices represent different national markets operating within the same pan-European exchange group, with the CAC 40 being the largest and most internationally referenced of the three.
The relationship between the CAC 40 and the EURO STOXX 50 is particularly close: as of September 2025, 15 French companies are shared between the two indices, meaning that French blue-chips carry significant influence over the broader pan-European benchmark. Investors tracking the EURO STOXX 50 are, in effect, substantially exposed to the same companies that drive CAC 40 performance. France represents 34.2% of total EURO STOXX 50 assets as of September 2025.
By contrast, the Nasdaq’s technology-heavy weighting — with thousands of constituents dominated by US software, semiconductor, and internet companies — offers a very different sectoral profile from the CAC 40’s diversification across luxury goods, energy, aerospace, and pharmaceuticals, making the CAC 40 an appealing option for investors seeking European exposure away from concentrated US tech risk.
What Are CAC 40 Companies?
The CAC 40 represents various industries within the French economy. Some sectors include personal products, pharmaceuticals, banking, industrial materials, telecommunications, publishing, media and entertainment, chemicals, etc.
The composition of the index is reviewed multiple times a year by the Conseil Scientifique. They study market capitalisation and turnover of constituent companies. They make their selection after the close of the third Friday of March, June, September and December.
| Name | Sector (ICB) | Weight (%) |
|---|---|---|
| SCHNEIDER ELECTRIC | Industrials | 7.57 |
| LVMH | Consumer Discretionary | 6.63 |
| L’Oréal | Consumer Discretionary | 4.80 |
| TotalEnergies | Energy | 9.52 |
| Sanofi | Health Care | 5.53 |
| Airbus | Industrials | 5.47 |
| Hermès | Consumer Discretionary | 2.92 |
| Kering | Consumer Discretionary | 1.09 |
| BNP Paribas | Financials | 4.98 |
| Safran | Industrials | 5.09 |
| Axa | Financials | 4.14 |
Source: Euronext
It’s not uncommon for companies to be taken off the list. Here are some criteria companies need to meet to be admitted to the CAC 40 listing:
- Euronext Paris as a market of reference
- Significant activities and presence in the French economy
- Members of staff and/or headquarters located in France
- Sizable trading volumes.
Here are the index’s most prominent constituents. Total Energies (largest weighting at 9.52%) is an integrated energy group spanning oil, gas, and renewables. Schneider Electric (7.57%, now the second-largest constituent) is a global leader in energy management and industrial automation. LVMH is the world’s largest luxury goods conglomerate by revenue, owning brands including Louis Vuitton, Moët & Chandon, and Dior. Airbus, headquartered in Toulouse with pan-European manufacturing operations, anchors the Industrials sector. Sanofi is one of Europe’s largest pharmaceutical companies. Michelin, the global tyre and mobility technology manufacturer, demonstrates that the index extends into heavy industry. BNP Paribas represents the financial sector.
Before any company can be assessed for inclusion, it must have completed an IPO and established a trading history on Euronext Paris. For companies already in the index, maintaining sufficient market capitalisation and trading volume is an ongoing requirement. If a constituent falls below the thresholds assessed at the quarterly review, it may be replaced by the next-largest eligible company. Think of it as a league table: strong performers stay in; those that fall in size or liquidity make way for rising challengers.
