Index

RECENT NEWS
The Economic Times  Dec 19  Comment 
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 1.1 per cent to 3,383.17, and climbed 5.95 per cent for the week.
Mondo Visione  Dec 17  Comment 
The price of Inter RAO ords (IRAO) will remain fixed in the MICEX Index, RTS Index, Electric Utilities Index and Broad Market Index for a period of suspension of trading of the security in the T+ order book. The suspension will start from...
Mondo Visione  Dec 16  Comment 
WIG20 will remain the main index and the underlying of futures and options WSE will continue to publish WIG30 but it will not introduce to trading any derivatives based on the index WSE will continue to publish mWIG40 and resume the...
The Economic Times  Dec 15  Comment 
Energy stocks "have dropped so much, you see bottom fishing in the big names but smaller companies continue to move lower," he said.
Mondo Visione  Dec 8  Comment 
Monthly review: November 2014 (pdf, 580 Кb) All reviews of Moscow Exchange Indices
Mondo Visione  Dec 3  Comment 
London Stock Exchange Group today announced the completion of the acquisition of Russell Investments. As part of this acquisition, FTSE and Russell Indexes are coming together to create a leading provider of index products that is uniquely...
Mondo Visione  Dec 1  Comment 
SERVICES IMPACTED:  Market Data MARKET:  Euronext Cash Markets, Euronext Derivatives Markets   PRODUCT: Indices   CATEGORY:  Technical issue The incident impacting indices and iNAVs has now been resolved. As of ...




 
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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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