CAC Next 20

CAC Next 20
Name	CAC Next 20
Operator	Euronext
Launched	2005
Constituents	20
Country	France
Related	CAC 40, Euronext Paris

CAC Next 20 The CAC Next 20 is a Paris‑listed share index that tracks twenty prominent French companies ranked immediately after the components of the CAC 40; it functions as a feeder and complement to broader Parisian market benchmarks such as SBF 120 and is maintained by Euronext. The index connects corporate issuers including multinational groups like Dassault Systèmes, Veolia, and Pernod Ricard with institutional market participants such as Amundi, BNP Paribas Asset Management, and BlackRock. It plays a role in derivatives markets alongside instruments traded on Euronext Paris and interacts with regulatory frameworks administered by Autorité des marchés financiers.

Overview

The index was introduced to provide a transparent, investable measure of mid‑large capitalisation firms operating from France and listed on Euronext Paris, offering investors exposure beyond flagship components like those in the CAC 40 while sitting within the scope of the SBF 120. Issuers in the index include firms active in sectors represented by companies such as Air Liquide, LVMH, Renault, Saint‑Gobain, and TotalEnergies but specifically composed of those ranked 41–60 by float‑adjusted market capitalisation. Market participants including Société Générale, Crédit Agricole, and international asset managers monitor the index for signals used in passive products, exchange‑traded funds, and portfolio rebalancing.

Composition and Eligibility

Eligibility is determined by free‑float market capitalisation and liquidity metrics applied to equities listed on Euronext Paris; candidates typically include firms comparable to Schneider Electric, Kering, AXA, Orange (telecommunications), and Bouygues in scale but ranked just below the primary benchmark. Constituency selection follows periodic reviews where governance and listing status are assessed alongside trading volumes that attract market makers such as Flow Traders and brokerages like Natixis. Corporates from industries represented by Danone, Capgemini, Publicis Groupe, Sodexo, and Michelin may be included when they meet the index’s quantitative thresholds for inclusion, as overseen by Euronext governance committees and subject to disclosure rules enforced by Autorité des marchés financiers.

Market Role and Performance

The index serves as a transition pool for firms moving between mid‑cap and large‑cap universes, acting as a precursor to promotion into the CAC 40 and as a benchmark for funds managed by Amundi, AXA Investment Managers, Lyxor Asset Management, and other managers. Performance is compared with domestic and international peers such as FTSE 100, DAX, Euro Stoxx 50, MSCI Europe, and S&P 500 for asset allocation decisions by sovereign wealth funds like Caisse des Dépôts, pension funds including CNP Assurances, and hedge funds in Paris and London. Trading in products linked to the index informs volatility measures used by exchanges and clearing houses, including LCH SA and Euronext Clearing.

Methodology and Calculation

Euronext applies a transparent methodology that uses free‑float adjusted market capitalisation and liquidity screens similar to those for CAC 40 and SBF 120, with formal review periods and eligible security criteria drawing on standards used by exchanges such as NYSE Euronext prior to integration. Calculation conventions mirror those of major indices: market capitalisation weighting, periodic rebalancing, and adjustments for corporate actions involving companies comparable to Vivendi, Alstom, Iliad, Casino Group, and Groupe BPCE. Index maintenance involves committees and data providers that reconcile corporate events and ensure continuity for derivative contracts listed on Euronext Derivatives.

Historical Changes and Rebalancing

Since its inception, the index has undergone scheduled and occasional ad hoc changes reflecting corporate mergers, listings, delistings, and spin‑offs involving firms in the French market such as ArcelorMittal, Alcatel-Lucent, EDF, Ineos acquisitions, and privatizations. Periodic reviews coincide with broader reshuffles in Paris benchmarks, and promotions to the CAC 40 or demotions to indices like CAC Small follow the same ranking mechanisms. Market events—including cross‑border takeovers by groups like Tata Group or Advent International and public offerings by companies resembling OVHcloud—have historically driven reconstitution rounds and constituent turnover.

Criticism and Limitations

Critics note that indices weighted by market capitalisation can concentrate exposure in a few large issuers and sectors, a concern raised by observers of benchmarks such as CAC 40 and Euro Stoxx 50; commentators from financial media outlets and analysts at Bloomberg, Reuters, and Les Echos have highlighted liquidity and representativeness limits. Academic researchers and practitioners at institutions like INSEE, HEC Paris, and Université Paris Dauphine have discussed methodology shortcomings including free‑float adjustments and the impact of cross‑shareholdings exemplified by corporate structures involving LafargeHolcim and ArcelorMittal. Regulatory scrutiny by Autorité des marchés financiers and responses from market operators such as Euronext continue to shape debates on transparency, index governance, and suitability for passive investment mandates.

Category:Stock market indices