Index

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DailyFinance  2 hrs ago  Comment 
SEATTLE, WA -- (Marketwired) -- 04/10/14 -- Value-oriented large- and small-cap U.S. stocks, after underperforming their growth-oriented counterparts in January and February, took the reins in March and value has continued to outperform growth in...
Yahoo  3 hrs ago  Comment 
The Dow, S&P 500 and Nasdaq all ended the day down sharply. What's behind the dive?
Mondo Visione  Apr 10  Comment 
Bloomberg LP and UBS today announced a strategic partnership that will result in Bloomberg Indexes being responsible for governance, calculation, distribution and licensing of the bank's market leading commodity indexes. The indexes will be...
Commodity Online  Apr 10  Comment 
Indian capital market opened flat amid positive global cues. Market traded choppy and lackluster in opening session.
Commodity Online  Apr 9  Comment 
Dan said that ETFS has not built any products based on these indices but plans to do so in the future. It is also looking at other asset classes for developing indices such as equities.
SeekingAlpha  Apr 8  Comment 
ByDuane Batcheler: BDCs have fallen an average of 7% since S&P announced on February 24, 2014 that it would remove BDCs from its indices and was followed by Russell on March 3, 2014. This article is a follow up to "BDCs and the Russell Indices"...
Mondo Visione  Apr 7  Comment 
As of April 16th,  2014 the composition of the corporate bond indices will be updated.   For the composition of Tel Bond Indices in Excel, click here. For the composition of Tel Bond Indices in PDF, click here.
FX Street  Apr 4  Comment 
Headlines Risk-on market sentiment and tighter credit indices Euro rates down after ECB meeting... For more information, read our latest forex news and reports.
FX Street  Apr 4  Comment 
The stock market indices had an interesting day today. The day started out with a pop to the... For more information, read our latest forex news and reports.
Mondo Visione  Apr 3  Comment 
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and Chaikin Analytics, LLC announced today the launch of three NASDAQ Chaikin Power Indexes: the NASDAQ Chaikin Power US Large Cap IndexSM (NQULCHK), the NASDAQ Chaikin Power US Small Cap...




 
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An index, when used with respect to financial markets, is a statistical measure of change in a securities market. Indexes, or indices (both are correct in American English), are imaginary portfolios of securities (usually stocks) representing a particular market or a portion of it.

This is the chart for the Dow Jones Industrial Average. Scroll down for a list of major world indices on Wikinvest.



Generally, an index has three main purposes:

  • An Index shows the performance of a basket of equities instead of just a single equity - IE an index is diversified.
  • An index can show the performance of a particular class of assets - for example, a biotechnology index would show the performance of a diverse group of biotech companies over time.
  • An index can also be used to provide a generic securities category for passive management and derivatives (passive investing).

Each index is calculated using its own methodology, and its value is expressed in terms of a change from an original base value. So the numerical value of an index is not as significant as the percent change in the index.

Investing in indexes is a way to invest in the performance of a broad market sector, or in the market as a whole. But to trade an index, an investor must buy or sell through a third party. Stock and bond market indexes are used to make mutual funds and exchange-traded funds (ETFs) that mirror the performance of the index. Regardless of security type, indexing can cover broad categories such as a Total Market Index like (VTI), index investing can also be more micro and track sectors such as Small Cap Brazilian Companies (BRF).

When investing in an Exchange Traded Funds that tracks an index, an investor buys or sells an entire group of stocks when trading that particular ETF - an example is the StreetTRACKS Dow Jones Global Titans Index Fund (DGT). Some indexes allow investors to put money into commodities - an example is the PowerShares DB Commodity Index Tracking Fund (DBC) - while others, like the Baltic Dry Index (BDI), are important economic indicators used to measure the rates under which services are sold in a particular industry (in the case of the BDI, dry bulk shipping). Still others are forward looking, measuring the anticipated volatility of the markets - an example is the Nasdaq Volatility Index (VXN).

Major World Index on Wikinvest

There are many products available to investors to give them exposure to international indices. Mutual Funds and ETFs are the most widely held instruments which investors use to track markets around the world. Some examples of Major World Indices would be MSCI Emerging Market Index (EEM), MSCI EFAE Index (EFA), or Vanguard Emerging Markets (VWO). These are just a few examples of common securities offered to investors seeking exposure to an international world market index.

It is important to consider the currency risks of investing in many international index funds as well as the potentially higher costs associated with the transactions needed to operate the fund (trading, taxes, etc).


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