DEMO — development content for layout testing. Not real editorial reporting.
DEMO content for development and layout testing — not real editorial reporting.
A stock index tracks the combined value of a defined group of shares. The rules set which companies qualify and how much weight each carries.
How it works
Many indices weight companies by market value, so the largest firms dominate; others weight equally or by price. The choice affects concentration and sector exposure.
An index is a rulebook, not a neutral snapshot. Its construction determines what its movements mean.
What to watch
Indices are periodically rebalanced as companies grow, shrink or change classification. Funds that track an index must trade around those changes, which can itself move prices.
Key concepts
- Equities
- Indices
