(BFM Stock Exchange) – Entry into a large reference index, such as CAC 40 or S&P 500, is perceived as a beneficial short -term event, due to the inclusion of these actions in funds responding to the performance of the index in question. But on the Middle Long term, the effect is completely negligible.

Statu quo for the CAC 40. Gathered Thursday evening, the members of the Euronext scientific council, the stock market operator in charge (in particular) of the Paris Stock Exchange, decided to leave the composition of the famous index unchanged. There will therefore be no new entrant.

If, symbolically, entering the CAC 40 constitutes a reason for pride for a company, and a certain recognition with the general public, is that interesting on the stock market? All other things being equal, an inclusion in the Parisian index is supposed to constitute a positive element.

Simply because the ETF (index funds) supposed to reply the performance of the CAC 40 must buy the new entrant (and sell the old resident) to continue to follow his evolution.

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Radically different scholarships

“Accessing the CAC 40 is prestigious and can be accompanied by an increase in courses due to the index funds that duplicate the index” but “without wanting to discourage the impetrants who can see the entry into the CAC 40 as a consecration, it should be noted that the most glaring inequalities reign within the index”, wrote the letter Vernimmen, at the end of 2023.

In fact, as shown in the infographic below identifying the stock market performance of the last groups arrived in the index since 2017 (with the exception of Vivendi which was briefly released in 2023 before returning six months later), entry to CAC 40 is in no way a pledge of stock market sinecure. Out of twelve shares, six accuse very high folds, by more than 50%

. Worldline, Atos and Alstom even left the index in 2021, 2023 and 2024, respectively.

“The entry into the CAC 40 does not guarantee a beautiful stock market course. The action, by joining the CAC 40, is then subject to indexes, which can, during increases in increases, lead to an increase in the title disconnected from the fundamentals. But conversely, when the cycle turns, the decline can be very severe for the title. It is sometimes a blessing in period of market progression and a curse in period. Explained at News Bulletin 247, Frédéric Rozier, manager at Mirabaud France, in a previous article.

“The risk during integration into the CAC 40 is to bring actions which are to their stock market peaks or close to this peak, with good news which is already behind us and an already tense valuation. This is often the case with industrial values, which can return while their activity is on the top of the economic cycle”, completed the expert.

In the twelve examples identified, each company has experienced a fairly specific situation. Hermès has taken more than 300% since its inclusion in 2018. The company has demonstrated a capacity to generate very high growth in all circumstances, thanks to its unique model of activity, with a demand that exceeds its product supply. Thales (up 134% since its arrival in 2019) benefited from market appetite for European defense values. The old continent has decided to rearm at high speed since Donald Trump decreed that he only wanted the United States to ensure the security of Europe as in the past.

The STMicroelectronics (2017) semiconductor group (2017) and the Professional Software Software Dassault Systems (2018) have suffered in the past two years but still have respective increases of 60% and 26%. Accor (+13.6% since its return to CAC 40 in 2023) and Bureau Veritas (+2% since its inclusion last December) sign correct performance, insofar as these two values ​​only recently arrived in the index.

Vertiginous falls

On the side of the drops, the falls are really violent. Eurofins (2021) is the typical example of the value entry “at the wrong time”, that is to say when society was playing in its historical heights. Its growth was then carried by its wide range of products and tests essential to the management of COVVI-19.

With the end of the pandemic and the normalization of the health situation, this winding wind obviously ended up disappearing. Since then, the post-Cavid turn has not been obvious to negotiate, at least on the stock market. The company has lost 52% since it entered the CAC 40.

Alstom (2020) has chained the problems linked to difficult contracts and inherited from Bombardier Transport, a Canadian group bought in 2021. The company, which has dives 54% since 2020, also disappointed on its cash generation several times, which forced it to carry out financial recapitalization in 2024. These old demons somewhat resurfaced in May during the publication of annual results. Alstom had then delivered disappointing cash generation objectives.

Teleperformance (-56.9% since its entry into CAC 40 in 2020) has suffered fears of upheaval of its economic model by artificial intelligence, fairly unjustified concerns. The outsourced customer relationship group has also delivered several disappointing publications in terms of increased income in recent years.

Edenred (-58% from the entry into the CAC 40 in 2023) also experienced a slowdown in its growth, certainly still relatively vigorous (6.7% in comparable data in the first quarter). Above all, the group suffered from a hardening of the regulations in Italy and fears of an unfavorable development of regulation in France as well as in Brazil, its two largest markets. So much so that the action was massacred, despite solid fundamentals.

Worldline has chained the heavy warnings on results since 2023. The payments specialist has the slightly enviable record of the strongest fall on a group of a group of CAC 40 (-59.24% on October 25, 2023) following one of these many “profit warnings” (there will be another in July 2024 and another September of the same year). And the latest annual results have also been disappointing. The title collapsed by 89.6% since 2020, the year of his entry into the CAC 40 which he left three years later. Deutsche Bank, however, wants to believe that the arrival of the new managing director, Pierre-Antoine Vacheron, marks “a new era” for the company.

As for Atos, its course has almost dived by 100% since 2017, the year when the company joined the CAC 40. Eight years later, everything has changed. The digital service company has suffered from major contracts, the decrease in its activities and a cash hemorrhage. The company conducted a heavy financial restructuring which led him to issue the astounding number of 190 billion shares, against a hundred million existing titles before this operation. The dilution was massive and the group recently made a group of shares per pack of 10,000. Its course was previously evolved at 0.0049 euros. Against more than 111 euros in 2017 …

An ephemeral effect in Wall Street

If we dwell on the CAC 40, how is it going to Wall Street, on its reference index, the S&P 500?

In a detailed note published last May, John Plassard, investment advisor at Mirabaud, cited various studies on the subject. The latest, that of Bloomberg Intelligence, of April 2025, showed that an inclusion in the S&P was reflected in an immediate average increase of 5% for the action of the company in question. “But this effect tends to fade within three months,” noted John Plassard.

The market specialist also mentions a March study of 2025 of the Morgan Stanley bank which shows that “the performance at 12 months of integrated companies (in the S&P 500) is neutral, while those that leave do not systematically underperform, except in the event of fundamental deterioration”.

“Contrary to popular belief, the entry or exit of a index is often a short -term technical phenomenon without determining impact on the creation of long -term value,” concluded John Plassard, in May.

Let us also cite a study by McKinsey of May 2024, again based on hundreds of entrants and outgoing S&P 500 and which evoked an “ephemeral” effect. “When an index announces that it includes or removes a company, the course of the latter’s action is changing – upwards for inclusion, downwards for suppression. But it then readjusts, generally within two months, the market inevitably getting closer to the intrinsic value of the company”, detailed the authors of the study.

“It is precisely because the index effect is ephemeral that the boards of directors should not endeavor to obtain it and that the leaders should not develop a strategy by having the indications in mind. For example, companies should not refrain from proceeding to make split or stations simply because, being smaller, they risk not being included in an index,” they recommended.