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CAC 40 performance: key figures for better investing
Understanding the performance of this index over different periods allows for a better grasp of its potential gains and an assessment of the associated risks. The concept is simple: the CAC 40 comprises 40 leading stocks listed on Euronext Paris, each impacting the overall score to varying degrees depending on its market capitalization and free float. Its average performance, according to several sources and internal calculations, has been around 6% to 7% per year since 1990; this rate includes the sometimes sharp fluctuations, particularly during the crises of 2001, 2008, and 2020. In this article, you will find precise data on returns, the most representative periods, and a comparison with cryptocurrencies, especially Bitcoin.
Table of Contents
Understanding the concept of CAC 40 return
The concept of return for a stock market index encompasses several aspects. First, the CAC 40 is based on a weighted calculation: each stock comprising the index has a weight proportional to its market capitalization and the proportion of freely tradable shares (the "float"). The index level therefore follows the valuation of the companies that make it up, in real time, on the Paris stock exchange.
However, when discussing the performance of the CAC 40, we can refer to two distinct indicators:
- The so-called "naked" return, which only takes into account the price performance of the index (it is sometimes called the CAC 40 Price Return index).
- The "overall" return, which includes reinvested dividends (often called CAC 40 GR for Gross Return or sometimes TR for Total Return).
Why distinguish between these two figures? Dividends have a considerable impact on long-term performance. According to some estimates, between 1990 and 2025, approximately half of the increase in capital invested in the Paris index comes from the reinvestment of these dividends in CAC 40 stocks.
How does it differ from other stock market indices?
Several major financial markets use the same calculation principle: the S&P 500 in the United States, the DAX in Germany, and the FTSE 100 in the United Kingdom. Each tracks a basket of large local stocks. The CAC 40 has the advantage of concentrating some of the largest market capitalizations in Europe, particularly in the luxury goods and energy sectors, making it crucial for understanding the dynamics of the Paris Stock Exchange.
Historical performance of the CAC 40 over the long term
To measure the performance of the index over several decades, many analysts rely on data collected since its creation in 1988.
What does this history reveal?
Since 1990, the CAC 40's return has averaged around 6% to 7% per year when factoring in price fluctuations and the impact of reinvested dividends . This range varies depending on the period considered and the dividend calculation method.
The index fell by 25% and 35% respectively in 2001 and 2002, linked to the bursting of the dot-com bubble and geopolitical uncertainties.
2008 represents one of the worst declines, with an annual drop of nearly 39%, in the context of the global financial crisis.
Conversely, 1999 and 2021 offered very positive results, exceeding 30% for the year (considering only the index itself).
This type of volatility demonstrates that investing in the CAC 40 is not a smooth ride. However, when considering an investment horizon of 10 or 15 years, average performance becomes favorable again, returning to that famous 6%-7% annual range.
Studies and precise sources to confirm these figures
According to Euronext (official website of the Paris Stock Exchange) , the CAC 40 has experienced fluctuating but overall positive long-term growth, thanks to its sector composition;
The impact of volatility on your investment
The volatility of the CAC 40, measured in annual standard deviations, can reach 20% in some years, or even more during major crises. Specifically:
Short-term investors (trading for a few weeks) are exposed to quick gains, but also to significant losses.
Over a longer horizon (5, 10, 15 years or more), volatility smooths out. This is why many fund managers suggest holding positions for an extended period to optimize investment returns.
Comparison of the returns of the CAC 40 and Bitcoin
The table below illustrates the performance evolution of the CAC 40 and Bitcoin over the past few years.
It shows that the CAC 40 offers more stable performance with moderate fluctuations, while Bitcoin exhibits extreme volatility,
alternating between spectacular rises and sharp falls. This difference highlights the distinct risk profiles of these two assets. Nevertheless, in the long term, the rise of decentralized finance makes Bitcoin significantly more profitable.
| Year | CAC 40 performance (%) | Bitcoin Yield (%) |
|---|---|---|
| 2023 | 16.5% | 162% |
| 2022 | -9.5% | -65% |
| 2021 | 28.9% | 66% |
| 2020 | -7.1% | 302% |
| 2019 | 26.4% | 95% |
| 2018 | -11.0% | -74% |
| 2017 | 9.3% | 1358% |
| 2016 | 4.9% | 123% |
| 2015 | 8.5% | 34% |
| 2014 | -0.5% | -58% |
| Total (2014-2023) | 59.34% | 7895.92% |
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CAC 40 performance over different periods
When discussing the performance of the CAC 40, it's helpful to distinguish between different periods, as a simple average figure doesn't capture the full range of performance. Here are some benchmarks based on the observed average and typical market cycles:
Over one year
The annual return of the CAC 40 varies considerably from year to year. For example:
Over the past twelve months (for example, March 2024 to March 2025), we can observe an increase of close to 7%, based on certain post-crisis economic recovery cycles.
During a stock market correction, the index can lose 10% or more in a single year, as in 2018 (around -11% in its "naked" version).
In the short term, the index is subject to numerous influences (geopolitical tensions, key interest rates, macroeconomic data), so significant fluctuations are to be expected.
Over 5 years
Looking back over five years already smooths out volatility somewhat. Generally, the CAC 40 remains within a range of 20% to 40% gain over five years (including dividends) if the period doesn't include a major crisis. Conversely, a sharp crash mid-cycle can negatively impact returns.
Concrete example: if we had invested at the end of 2016 and sold at the end of 2021, the average annual appreciation would be around 6.5% to 7%, thanks in particular to the post-2020 economic recovery and the good performance of luxury or health stocks.
Over 10 years and more
In the long term, many analysts believe that the index's performance often aligns with the overall economic growth of the eurozone, while also benefiting from dividend payments. Thus, over a full decade, an average return of over 6% per year (including dividends) can be achieved.
This growth prospect is most likely to materialize if the investor maintains their position and systematically reinvests dividends. The cumulative effect of distributions allows for a significant increase in capital over the years.
Focus on the sector breakdown of the CAC 40
The overall performance of this index depends heavily on the sectoral distribution of its constituent stocks:
Luxury sector
Groups like LVMH, Hermès, Kering, and L'Oréal often represent more than 30% of total market capitalization. This sector has posted impressive performances over the last decade, driven by sustained international demand. However, their dividend contributions, while consistent, remain relatively lower than in other sectors.
Banking and financial sector
Banks such as BNP Paribas, Société Générale, and Crédit Agricole have historically offered dividends . For example, in 2024, BNP Paribas and Crédit Agricole offered returns of over 6% to their shareholders. However, volatile during periods of financial stress.
Energy and telecommunications sector
– TotalEnergies often has a significant impact on the performance of the CAC 40. Its dividends are generally attractive, with a payout ratio that boosts the overall return of the index. – Orange, the main telecom player in the index, often pays a high dividend, sometimes exceeding 6%, even if the share price doesn't always show explosive growth.
The other major players
Air Liquide, Schneider Electric, Danone, Engie, and Axa also contribute to the stock market's momentum. With the rise of the industrial sector and the energy transition, some of these companies are recording high market capitalization and returns .
Comparison of the performance of the CAC 40 and Bitcoin
The convergence between the performance of the CAC 40 and that of Bitcoin may seem surprising, given how disparate these two asset classes appear. Yet, active investors regularly compare the returns of the Paris Stock Exchange to those of the most famous cryptocurrency, in order to seize diversification opportunities.
Bitcoin experienced an bull run between 2020 and 2024, recently surpassing $100,000.
Over the same period, the CAC 40 index rose by several tens of percent, while Bitcoin climbed by hundreds of percent.
However, Bitcoin's volatility remains significantly higher. In just a few months, the cryptocurrency can lose more than 50% of its value, whereas a stock market index like the CAC 40 rarely sees a correction exceeding 20% or 30% over the same period.
The rise of Bitcoin and decentralized finance
Bitcoin emerged in 2009 and quickly established itself as a major asset. Its narrative is based on a limited supply of 21 million units and a decentralized operation via the blockchain. Many market participants saw it as a potential safe haven from accommodative monetary policies, while others were drawn to it for its potential for high returns.
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It includes detailed video tutorials on centralized exchanges, software wallets, hardware wallets, and best practices. The program can be accessed from the header or the link above.
In parallel, decentralized finance (DeFi) has emerged on other blockchains, including Ethereum. DeFi offers an alternative to traditional financial systems by providing:
- Automated lending and borrowing protocols.
- Decentralized trading services allowing the exchange of different crypto-assets.
- staking opportunities or yield farming to generate passive income.
What lessons can investors learn?
The CAC 40 offers moderate but relatively stable average growth, supported by more tangible economic fundamentals and the growth of large listed companies.
Bitcoin can generate meteoric rises, but also sharp falls, in very short periods.
Diversifying one's portfolio by including a limited percentage of crypto-assets can be a strategy, provided one can tolerate high volatility and risk.
How to invest to benefit from the performance of the CAC 40?
You have several options for gaining exposure to the Paris index. The most common are:
Live actions
Acquire individual stocks from the CAC 40 to build your portfolio. Advantages:
- Freely choose which companies to focus on (for example, the luxury or energy sector).
- Collect the dividends yourself and decide whether or not to reinvest them.
Disadvantages:
- It requires time to analyze each listed company .
- Brokerage fees may be high if you place orders frequently.
ETFs replicating the index
Exchange-traded funds (ETFs) have become a preferred way to track the performance of a stock market index. A CAC 40 ETF, managed by Lyxor or Amundi, for example, aims to replicate the index's basket of stocks. You buy just one ETF share, and you are exposed to all 40 stocks.
Management fees are generally less than 0.3% per year for a basic CAC 40 ETF.
Some ETFs automatically reinvest dividends (accumulative), others distribute them to the investor.
Derivatives (futures, options, turbos)
More technical in nature, these products are aimed at experienced investors. They allow you to bet on the rise or fall of the CAC 40 in the short term, often with leverage. This can amplify both gains and losses.
Practical tips for optimizing profitability
Aim for a long-term investment horizon if your goal is wealth building. The CAC 40 shows its full potential over 5, 10 years or more.
Reinvest dividends to increase returns through compounding.
Diversify, not only within the index itself (across multiple sectors), but also into other asset classes (bonds, real estate, gold, etc.) if you are looking to reduce the overall volatility of your portfolio.
The stock market cycle and its impact on the CAC 40
Like any index, the CAC 40 follows market phases:
- Expansion phase: the economy is doing well, companies are posting rising profits, the index is climbing steadily.
- Market peak: prices reach record highs, and stock values sometimes become overvalued. The risk of a correction increases.
- Recession or contraction: after a shock (financial crisis, health crisis, etc.), confidence erodes, the index falls.
- Recovery: confidence returns, market players buy again and prepare for the next phase of growth.
Concrete examples of recent cycles
From 2009 to 2020, the post-subprime mortgage crisis expansion was one of the longest, with multiple annual record highs for stock market indices.
In 2020, the health crisis triggered a sharp decline, followed by a marked recovery in 2021.
Geopolitical tensions in 2022 led to greater volatility, impacting the index's performance, but significant new gains were observed as early as 2023.
Monitor macroeconomic indicators
- Interest rates: if central banks raise rates, the cost of credit for businesses can rise, putting pressure on their margins.
- Inflation: Moderate inflation is often well tolerated by the stock market. Very high inflation disrupts investment plans and erodes profitability.
- GDP growth: a rising GDP fuels demand for goods and services, which benefits CAC 40 companies.
- International context: political crises, conflicts or trade wars can slow down market dynamics.
Profitability and growth prospects
For the average investor, targeting the CAC 40 index proves to be an effective way to capture the growth of the largest French companies. Its "advantage" lies in automatic sector diversification (even if a few large groups sometimes dominate more than 45% of the total weighting).
The advantages of a long-term investment
- The cumulative effect of dividends: by reinvesting each dividend received, you benefit from a snowball effect. In the long term, this accumulation of distributions plays a crucial role in overall returns.
- Capital gains: rising prices over several years can generate substantial gains, especially if you acquired your positions during a bear market phase.
- Inflation protection: Generally, stocks rise if inflation is not too high. In this context, holding a basket of CAC 40 stocks can protect against the loss of purchasing power due to inflation.
The limitations of the strategy
- The CAC 40 remains concentrated in a single country: France. Even though the companies in the index are often international, shocks specific to the Eurozone or to national politics can affect it.
- The lack of rapid performance: the CAC 40 is not designed for ultra-short-term trading. It is better viewed as a medium- to long-term investment.
- Dependence on certain dominant groups (particularly luxury or energy) can accentuate volatility.
- A reversal of the trend in these sectors could have a significant impact.
Bitcoin: Facing Traditional Finance
What about decentralized finance?
Beyond Bitcoin, decentralized finance offers protocols where each user can lend, borrow, or exchange tokens independently, without going through a traditional bank. This innovation is attracting a growing number of investors, intrigued by the potential returns it offers (staking, liquidity pools, etc.).
However, DeFi often operates on blockchains like Ethereum, which are more vulnerable to hacks and code vulnerabilities. Some therefore see it as a highly specialized complement, but not a direct competitor to the CAC 40, which remains the domain of solid and regulated companies.
Conclusion: Stable CAC 40 returns and a complementary Bitcoin
The long-term return of the CAC 40 has historically remained around 6% to 7% per year, taking dividends into account. The French index remains a solid vehicle for accessing the growth of major French and international companies, despite the volatility of the stock market cycle.
For its part, Bitcoin symbolizes the dynamism of decentralized finance, with the potential for sometimes spectacular gains, coupled with extreme volatility. The two approaches are not mutually exclusive: they can complement each other for those wishing to diversify their investments, manage volatility, and leverage various sources of performance.
In summary
- The CAC 40 is suitable for investors seeking a medium to long-term return dividends from 40 large listed companies .
- Volatility remains present, with significant variations from year to year (crash in 2008, crisis of 2020, etc.).
- Bitcoin also a very high risk of correction. Nevertheless, it attracts an audience seeking diversification and returns outside the traditional stock market framework.
Cryptocurrency investments are risky. Crypternon cannot be held liable, directly or indirectly, for any damage or loss resulting from the use of any product or service mentioned in this article. Readers should conduct their own research before taking any action and only invest within their financial means. Past performance is not indicative of future results. This article does not constitute investment advice.
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Yoann
Trained as an engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future, I am participating in its democratization by developing Crypternon.