CAC 40 What Is It

CAC 40: What is it? Complete Guide for Investors

The CAC 40 is the benchmark stock market index at the Paris Stock Exchange and a true barometer of the performance of the French financial markets. It encompasses the 40 largest French capitalizations listed on Euronext Paris, thus representing the diversity and economic strength of France on the international stage. This complete guide updates the data to November 11, 2025 and presents everything about the CAC 40: definition, current composition, selection methodology, operation, historical and recent performance, as well as the various strategies for investing effectively, whether you are a beginner or a seasoned professional.

Introduction to the CAC 40

Created in 1987, the CAC 40 (for Continuous Assisted Quotation) has become in just a few decades the flagship stock market index in France. It was originally launched by the Paris Stock Exchange — now integrated into Euronext — to provide a reliable and representative measure of the trend of the largest French companies. It stands out for its ability to capture the health and economic dynamics of the country, but also to serve as a major reference point for local and international investors. More than a simple basket of stocks, it embodies the showcase of the jewels of the French economy and their projection abroad.

Role and Strategic Importance of the CAC 40

• Economic Health Indicator: The evolution of the CAC 40 and investor confidence are strongly correlated with the macroeconomic situation in France and Europe.
• Reference for Investors: The CAC 40 is the base index for many financial products, such as trackers (ETFs), structured products, and futures contracts.
• Diversification Tool: Thanks to the sectoral diversity of its members, the index constitutes a solid basis for diversifying one’s portfolio while focusing on the French economy.

How Does the CAC 40 Index Work?

The CAC 40 index is a market capitalization-weighted index of the companies that make up the index, meaning it takes into account the total value of the shares in circulation, excluding those held long-term by strategic shareholders. The level of the index is updated in real time with each transaction on the relevant securities during Euronext Paris trading hours.

The calculation methodology of the CAC 40 is based on the following formula:

• The sum of the closing prices of the 40 stocks, weighted by the float (that is, the quantity of shares available for trading on the market).
• The index is adjusted to take into account extraordinary operations (extraordinary dividends, issuance of shares, mergers).
• The base 1000 was set on December 31, 1987.

This structure ensures a faithful representation of the French market while allowing comparisons over time or against other international indices (DAX, FTSE 100, S&P 500...)

How Are Companies Selected for the CAC 40?

The composition of the CAC 40 is reviewed every quarter by the Scientific Council of Indices of Euronext. This committee of experts analyzes in particular:

• The floating market capitalization (weighted, to reflect only the shares actually available to the public).
• The trading volume to ensure sufficient liquidity.
• The sectoral representativeness (industry, technology, finance, services, consumption, etc.) to ensure the diversity of the index.

At each review, one or more companies may enter or leave the CAC 40 to maintain this logic of representativeness and liquidity. This flexibility ensures the relevance and modernity of the index to reflect the real economy in constant evolution.

Official Composition of the CAC 40 on November 11, 2025

Here is the updated and official list of the 40 companies that make up the CAC 40 on this date:

• Accor
• Air Liquide
• Airbus
• ArcelorMittal
• AXA
• BNP Paribas
• Bouygues
• Bureau Veritas
• Capgemini
• Carrefour
• Crédit Agricole
• Danone
• Dassault Systèmes
• Edenred
• Engie
• EssilorLuxottica
• Eurofins Scientific
• Hermès International
• Kering
• L'Oréal
• Legrand
• LVMH Moët Hennessy Louis Vuitton
• Michelin
• Orange
• Pernod Ricard
• Publicis Groupe
• Renault
• Safran
• Saint-Gobain
• Sanofi
• Schneider Electric
• Société Générale
• Stellantis
• STMicroelectronics
• Teleperformance
• Thales
• TotalEnergies
• Unibail-Rodamco-Westfield
• Veolia
• Vinci

Note: Unlike some claims found on the internet, Canal+ S.A. has never been part of the CAC 40. The companies making up the index evolve exclusively after Euronext revisions according to strict criteria of capitalization and liquidity.

Sectors Represented within the CAC 40

The CAC 40 brings together large groups from multiple sectors:

• Industry : Airbus, ArcelorMittal, Bouygues, Saint-Gobain, Renault, Michelin, Safran, Stellantis, Thales...
• Banking and Insurance : BNP Paribas, Société Générale, Crédit Agricole, AXA
• Technology : Dassault Systèmes, Capgemini, STMicroelectronics, Teleperformance
• Consumer Goods, Luxury and Distribution : L'Oréal, LVMH, Hermès, Kering, Carrefour, Danone, Pernod Ricard
• Services : Engie, Veolia, Vinci, Unibail-Rodamco-Westfield, Orange
• Healthcare and Life Sciences : Sanofi, Eurofins Scientific, EssilorLuxottica

This diversification ensures that the index remains representative of the economic reality and less dependent on a single sector.

Price and Key Figures of the CAC 40 in November 2025

On November 11, 2025 at 16:42, the CAC 40 showed a level of 8,061 points, up 1.40% for the day. Here are some examples of stock prices of leading companies in the CAC 40 on this date:

• Sanofi: €89.05
• Capgemini: €131.65
• Société Générale: €56.72
• Hermès International: €2,163
• Stellantis: €9.28

The evolution of the index during the first half of November highlights the inherent volatility of the stock markets while confirming a moderate upward trend for the current year.

Weight of Values in the Index: Who Weighs the Most?

The performance of the CAC 40 depends heavily on the weight of each value, calculated based on the floating market capitalization. In November 2025, the companies with the greatest weight are generally LVMH, L'Oréal, TotalEnergies, Sanofi, Hermès and Schneider Electric. Note: A strong variation in one of the large capitalizations significantly impacts the overall performance of the index.

Example of Major Holdings (November 2025)

• LVMH: Weight greater than 10% of the index
• L'Oréal, TotalEnergies, Sanofi, Hermès, Schneider Electric: each with a weight greater than 4%

This method of calculation with floating weighting is designed to reflect the reality of available capitalization and avoid over-weighting of shares held by strategic shareholders or the state.

Detailed Methodology for Revision and Calculation of the CAC 40

The official methodology of the CAC 40 relies on:

• Quarterly Selection : The Scientific Council of Euronext analyzes at the end of each quarter the ranking of the largest floating market capitalizations and determines admissions and exclusions if necessary.
• Weighting of Shares : The stocks are weighted according to their floating market capitalization, which enhances the influence of publicly traded companies on the performance of the index.
• Regular Technical Adjustments : Taking into account operations on shares (detached dividends, issues, consolidations, mergers, splits).

The objective is to ensure the liquidity of the index while providing the most accurate representation of the dynamics of the French stock market.

History and Performance of the CAC 40

Main Milestones Since Its Creation

Since its creation, the CAC 40 has experienced several major cycles:
• Years 1990–2000: economic expansion and almost continuous growth of the index.
• Years 2000: bursting of the Internet bubble followed by the subprime crisis, with high volatility (-43% in 2008).
• Period 2010-2019: sustained recovery, new record capitalizations, development of luxury and digital sectors.
• COVID-19 Crisis (2020): sharp crash at the beginning of 2020, then strong rebound thanks to fiscal and monetary policies of the States and the ECB.
• 2022-2025: increased volatility but new upward trend, driven by the performance of luxury, industry, and energy champions.

Recent Performance of the CAC 40 in 2025

The index progressed moderately in 2025, fluctuating around 8,000 points in November after some episodes of volatility. The year was characterized by robust performance of luxury groups and technology stocks, while finance and certain industrial sectors underwent sectoral adjustments linked to the global economic situation.

From January to November 2025, the average performance was around +8%, with peaks above 8,100 points at the end of the quarter, a level never reached before.

Dividends and Yield of the CAC 40

The CAC 40 exists in several versions, including the CAC 40 price (without reinvested dividends) and the CAC 40 GR (gross return, dividends reinvested). The annual average yield of the CAC 40, over the long term, oscillates around 2.8% to 3.5% thanks to the dividend distribution policy of the companies that make up the index.

For a long-term investor, including dividends in the total performance significantly increases the yield compared to the simple index (price only).

Comparing the CAC 40 to Other Global Indices

Investment Strategies in the CAC 40

1. Direct Investment in CAC 40 Stocks

Purchasing individually the stocks of CAC 40 companies allows for total flexibility, but requires a significant capital to replicate the performance of the index, not to mention the brokerage fees. This approach is ideal for an informed investor wishing to target specific sectors or stocks.

2. Investing Through CAC 40 ETFs and Trackers

One of the most accessible methods is to invest in trackers or ETFs indexed on the CAC 40. These exchange-traded funds faithfully replicate the evolution of the index (with or without leverage, distributing or accumulating dividends). They allow you to:

• Spread your investment across all major French companies with just a few hundred euros.
• Benefit from reduced management fees (generally ranging from 0.08% to 0.35% per year).
• Simplify arbitrages and international diversification through a single listed asset.

Concrete example: An investor can allocate €5,000 to a CAC 40 ETF and make scheduled monthly contributions to benefit from long-term performance without having to manage 40 individual stock market positions.

3. Thematic Funds and Managed Portfolios Exposed to the CAC 40

In addition to ETFs, there exist thematic investment funds that incorporate partial or full exposure to the CAC 40. For example, growth-oriented, dividend-focused, or energy-transition funds invest in CAC 40 members while conducting sectoral or ESG selection.

4. Short-Term Trading on the CAC 40

Active investors and seasoned traders often use derivatives linked to the index (options, futures, CFDs...) to speculate on short-term movements of the index. This leveraged type of investment carries high risk and requires perfect mastery of derivative markets operations.

Advantages and Limitations of Investing in the CAC 40

Advantages

• Exceptional Liquidity: CAC 40 stocks are among the most traded on Euronext.
• Economic Representativity: Sectoral diversity, stability of large capitalizations.
• Accessibility: Investment ease thanks to ETFs, PEA, and life insurance.
• International Dynamism: 90% of the revenue of CAC 40 companies is generated outside France.

Inconveniences

• Market Risk Exposure: Sensitivity to global macroeconomic shocks and international economic conditions.
• Dependency on Certain Key Sectors: Luxury, energy, finance remain predominant and may increase sectoral volatility.
• Limited Presence of Innovative SMEs: Outside major groups, few disruptive technological values are represented.

FAQ about the CAC 40

How to follow the CAC 40 in real-time?

The CAC 40 prices are continuously broadcasted on all specialized platforms, financial websites, mobile trading apps, and the official website of Euronext Paris. Variations are updated every 15 seconds during stock exchange opening hours.

What is the best time to invest in the CAC 40?

There is no perfect time. Progressive investment and programmed investment strategies are often recommended to smooth out the purchase price over time and minimize the impact of temporary volatility on invested capital.

Is the CAC 40 accessible via a PEA or a life insurance policy?

Yes, nearly all CAC 40 products (direct stocks, ETFs, mutual funds...) are eligible for the Employee Stock Ownership Plan (ESOP) and can also be integrated into unit-linked funds within a life insurance policy. This favorable tax framework encourages long-term investment in major French companies.

How to Calculate the Real Performance of the CAC 40?

The "real" performance of an investment on the CAC 40 should include: the index performance in points, reinvested dividends, management fees (where applicable), and for a French investor, the applicable taxes on capital gains and dividends. The CAC 40 "GR" (Gross Return) is the index that best reflects total performance including dividends, while the "price" index only considers price changes.

Conclusion: The CAC 40, a Pillar of Investment in France

The CAC 40 remains an indispensable index for any investor wishing to expose themselves to the French economy or diversify their European portfolio. Its updated composition, rigorous methodology, and stability on the international financial scene make it a preferred tool for investment, both for long-term strategies and active trading. By staying attentive to its composition evolution, value weighting, and the fundamentals of member companies, each investor can optimize their strategy and rely on one of the world's most robust indices.