Thursday, December 23, 2010

Index

An index is designed to measure the movement in prices of a basket of securities. Each index has its own methodology and base number, but all are designed with some sort of analysis in mind, for example market analysis, performance analysis and economic research. Some of the prominent companies in this space include Dow Jones, MSCI Barra, Standard & Poor's, FTSE, and others. Indexes are important in funds management as they provide useful benchmarking and performance analysis tools. Indexes can also be used to monitor the overall performance of a market or asset class. Indexes can also be used in passive investment management, in the case of index funds and index ETFs.

Synonyms: Benchmark, Market, S&P 500, Dow Jones, Yardstick, Index fund, Index ETF

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