Four Forty: Everything to Know About the CAC 40
The CAC 40 index has held a central position in French finance for over three decades. It reflects the performance of the largest companies listed in Paris and serves as an indicator followed daily by investors, analysts, and economic media.
Definition of the CAC 40
Created on December 31, 1987, the CAC 40 – Continuous Assisted Quotation – is the flagship index of the Paris Stock Exchange. It includes the 40 largest French capitalizations listed on Euronext Paris, selected based on their trading volume and sectoral representativeness. The CAC 40 acts as a barometer of national economic health and increasingly reflects global economic variations due to the internationalization of its companies.
The index lives up to its name: "Four Forty" simply means it groups forty emblematic companies carefully chosen to represent the economic dynamism of France.
Operation and Calculation of the Index
The CAC 40 is a capitalization-weighted index. Only shares available for trading on the market are considered; shares held by strategic or majority shareholders are excluded from the calculation. The weight of a company within the index depends on its relative size but cannot exceed 15% – a rule ensuring diversity and preventing the index from being dominated by a few giants.
The value of the CAC 40 is adjusted in real-time during the opening hours of the Paris Stock Exchange, from Monday to Friday, reflecting instantaneously the price fluctuations of member companies.
Composition of the CAC 40 and Entry Criteria
The list of companies comprising the CAC 40 is reviewed quarterly by an Independent Scientific Council attached to Euronext. This council adjusts the composition based on trading volume, liquidity, and sectoral representativeness. Companies can therefore enter or leave the index according to changes in their performance or economic significance.
The CAC 40 covers all sectors of activity:
- Luxury (LVMH, Hermès, Kering)
- Banking and insurance (BNP Paribas, Société Générale, AXA)
- Energy (TotalEnergies, Engie)
- Industry and construction (Vinci, Bouygues, Saint-Gobain)
- Pharmaceuticals and healthcare (Sanofi, Eurofins)
- Technology (Dassault Systèmes, STMicroelectronics, Worldline)
- Food and beverages (Danone, Pernod Ricard)
- Retail and services (Carrefour, Teleperformance, Edenred)
This sectoral diversity allows the index to serve as a robust and versatile indicator for the entire national economy.
Key Figures of the CAC 40 in 2025
In 2025, the CAC 40 displays performance that testifies to both its strength and its sensitivity to global economic cycles.
- Net cumulative profit for the first half of 2025: 53,162 billion euros
- Net cumulative profit for the first half of 2024: 74,250 billion euros
- Net profit change over one year: -28%
- Net cumulative revenue for the first half of 2025: 833,89 billion euros
- Net cumulative revenue for the first half of 2024: 841,237 billion euros
- Revenue change (S1 2025 / S1 2024): -1%
- Total market capitalization on August 27, 2025: 2,429 billion euros
- Historical record of the index: 8,258.9 points on October 21, 2025
These figures illustrate a relative stability in revenue despite a marked decrease in net profit over the period, a phenomenon linked to a more complex global economic situation and increased costs for some French multinational companies.
Historical evolution and records of the CAC 40
The CAC 40 index has experienced spectacular growth since its creation, rising from 1,000 points to over 8,250 points by October 2025. This evolution highlights the remarkable development of major French companies and their ability to adapt to international challenges and successive crises. Despite the inherent volatility of financial markets, the CAC 40 remains an indispensable reference that significantly influences investment, the valuation of companies, and the perception of the national economy.
Over the decades, numerous events – the 2008 global financial crisis, the COVID-19 pandemic, geopolitical tensions – have impacted the index. However, its capacity for recovery and the robustness of its member companies illustrate the dynamism of the French economic fabric.
The CAC 40 in the global financial landscape
Although the CAC 40 primarily represents France, its member companies are largely internationalized: more than 60% of the cumulative revenue of CAC 40 companies is generated outside national borders. This internationalization strengthens the influence of the index while making it sensitive to global fluctuations, such as the dollar exchange rate, foreign monetary policies, or the evolution of emerging markets.
The CAC 40 is not the only barometer of the French economy:
- SBF 120: includes 120 major listed companies in Paris
- CAC Next 20: includes the 20 largest companies just behind the CAC 40
- CAC PME: dedicated to small and medium-sized listed companies
- CAC 40 ESG: index incorporating environmental, social, and governance criteria
Thus, the CAC 40 is part of a broader set of indicators used by economists to track the evolution of the French entrepreneurial fabric.
Importance of the CAC 40 for investors
For investors, the CAC 40 is an unmissable reference: it serves as a benchmark for the performance of French equity portfolios, as a benchmark for index funds, and as a basis for many derivative products. The valuation of the CAC 40 is monitored in real-time by analysts, who rely on the trend of the index to measure risk appetite and market confidence.
The investment strategies linked to the CAC 40 include:
- The purchase of ETFs (Exchange Traded Funds) replicating its performance
- Trading on futures and index options
- The creation of diversified portfolios based on its components
Global financial institutions, pension funds, and individuals use the index to guide their investment decisions and compare the performance of French assets with other international indices, such as the German DAX or the US S&P 500.
Criteria and mechanisms for revising the index
The composition of the CAC 40 is reviewed every three months by a scientific committee at Euronext, which examines trading volumes, free-float market capitalization, sectoral representation, and liquidity. Companies that no longer meet the criteria can be replaced by firms that have experienced sustained growth. This revision process ensures that the CAC 40 remains relevant and dynamic, while avoiding a fixed hierarchy.
Influence of the CAC 40 on the French economy
Due to its central position, the CAC 40 plays the role of an economic thermometer. It influences both the decisions of institutional investors and the confidence of French households. A continuous rise in the index often signals a period of growth, whereas a decline is interpreted as a sign of tension or uncertainty. However, it should be noted that the CAC 40 represents only a part of the national economic fabric, and many innovative SMEs are not represented within it.
Governments, macroeconomic analysts, and media monitor its evolution continuously to detect major trends and anticipate the impact of significant events.
Criticisms and limitations of the CAC 40
If the CAC 40 is an indispensable tracking tool for the French economy, it does present some limitations. First, it does not reflect the true diversity of French companies – small and medium-sized enterprises, mid-cap companies, and innovative startups remain underrepresented. Second, its composition favors large multinational groups whose majority of revenue is generated abroad; thus, it is more of an index of multinationals than a faithful mirror of the French domestic market.
The functioning of the index and the weighting favor mechanically the most financialized sectors, such as finance and luxury, which may exclude certain activities that are nonetheless strategic for the national economy.
Perspectives and trends 2026
At the dawn of 2026, several trends shape the outlook for the CAC 40: increased inclusion of technology companies, rising importance of ESG criteria (environmental, social, governance), digitalization of markets, and adaptation to climate and geopolitical challenges. The performance of the CAC 40 will largely depend on global growth, European financial stability, central bank attitudes, and the adaptability of major French companies to structural changes.
The continued monitoring of the index will remain crucial for anticipating major shifts, guiding investment choices, and understanding the trajectory of France in a constantly changing global context.