Indexes

Stock Indexes are created to classify, monitor and measure the performance of a group of listed Stocks. Indexes are developed to a standard set of metrics and methodologies, by the Index Creator.

A Stock Index is created to a standard set of metrics and methodologies defined by the creator of the Index, which is often the creator of a Family of Indexes. A Stock Index is created to classify Stocks by any number of different criteria and is used to monitor and measure the performance of a group of listed Stocks. Stock Indexes are extremely diverse and can be defined, for example as, a broad market index (S&P 500), a Sector Index (Financial or Pharmaceuticals), by region (European Autos) or by Market Cap (Russell Small Cap). In the creation of an Index Family, for example MSCI or FTSE Russell, the core methodology can be quite uniform, but the Indexes within this family can still be very diverse. Index tracking or passive investing via ETFs are based on an Index as defined in the Fund’s documentation.