Source: Bloomberg
Source: Bloomberg

The first is sensitivity to the Euro, as seen in the above chart.

The second is composition. There’s too much automotive and financial stuff in the DAX:

Source: Bloomberg

Banks are largely a rate play. The automakers are floundering in a world of excess capacity and disappointed during Q2, and they also have the diesel scandal to overcome. VW looks cheap at 5.5X forward earnings. I like BASF, Siemens and a couple of other big industrial companies. But the index as a whole doesn’t persuade me.