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The KAXcap performance index will be displayed in the Official List and on the Exchange's website together with the other indices. The indices have been calculated from 31 December 1995 with the initial base value of 100. On the website of the Exchange the daily closing values will be available on the so-called master data page of the KAXcap Index.
In the new capped indices the maximum weight of a constituent share is 10 per cent. Compared with the present KAX Index, six companies will have their weights reduced in the KAXcap. The reduction will affect the following shares: Danske Bank, H Lundbeck, Novo Nordisk B, D/S 1912 A, D/S 1912 B, D/S Svendborg A, D/S Svendborg B and TDC.
Capped indices are primarily targeted at institutional investors, who are subject to restrictions as regards risk exposure in individual companies.
Senior Vice President Peter Belling comments: "By introducing capped versions of the Exchange's KAX All-Share Index we are meeting the requirements of the institutional investors, including investment funds which are subject to diversification requirements. The new indices will strengthen our information products directed towards the professional market players enabling us to support their requirements for benchmarking."
The new capped indices follow a European directive applicable to investment funds, the so-called UCITS rules. Investment funds and institutional investors are typically subject to these rules, which means that an ordinary investment fund may not invest more than 5 per cent of its assets in the shares of a single company. However, this may be raised to 10 per cent provided that the companies that weight between 5 and 10 per cent do not exceed 40 per cent in the aggregate. The 8 largest companies of a portfolio comprising X share classes will, for instance, be capped as follows:
| Company | Before Cap | After Cap | Process |
| A | 17 | 10 | The weight of the companies A-F, which all exceed 5 per cent, totals 58.4 per cent before the capping, which means that the 40 per cent threshold is exceeded. |
| B | 14 | 10 | The companies A and B also exceed the 10 per cent threshold for a company’s maximum weight, consequently, they are both reduced to 10 per cent. Since the weight of the companies still exceeds 40 per cent (47.4 per cent), even after the capping of the companies A and B, the companies E and F will also have to be capped. |
| C | 8 | 8* | |
| D | 7 | 7* | |
| E | 6.5 | 5 | After the capping, the weight of the companies between 5 and 10 per cent totals 35 per cent, and thus all the rules of the UCITS provision have been complied with. |
| F | 5.9 | 5 | |
| G | 3 | 3* | A new capping will not be made until the portfolio is reviewed, i.e. at the beginning of June and December. |
| H | 2 | 2* |
* In reality the weights of these companies will be increased when the weights of other companies are reduced. If the weight of the companies subsequently exceeds 10 or 5 per cent, they too will be capped.
