Index

RECENT NEWS
Mondo Visione  Feb 2  Comment 
As from today Oslo Børs is calculating 20 new bond indices. With that the bond index portfolio is expanded from five to 25 indices. The new indices are divided into three categories with Norwegian government bonds, treasury bills and...
MarketWatch  Jan 28  Comment 
U.S. stock-market indexes turn negative as Wall Street reacts to Fed statement
Reuters  Jan 27  Comment 
U.S. stocks fell in a broad decline on Tuesday, with the Dow seeing outsized losses after several blue chip components' results pointed to weakening conditions, while an unexpected decline in durable goods orders also weighed on sentiment.
The Economic Times  Jan 23  Comment 
Major indexes, however, rose for the first week in four, boosted in part by the European Central Bank's decision on Thursday to further stimulate euro zone growth.
MarketWatch  Jan 21  Comment 
IBM is biggest decliner as U.S. stock indexes turn south




 
TOP CONTRIBUTORS

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).


Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki