Capitalization-Weighted Index

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Capitalization-Weighted Index

A stock index which is computed by adding the capitalization (float times price) of each individual stock in the index, and then dividing by the divisor. The stocks with the largest market values have the heaviest weighting in the index. See also Float, Divisor.

Capitalization-Weighted Index

An index in which the price is determined by the price of individual stocks, weighted for total market value. For example, if the price of a component stock of the index changes, its effect on the index as a whole is proportionate to share's price multiplied by the number of shares the company has outstanding. This means that changes in price will affect the index more if the component company has greater value. Most non-American market value-weighted indices give further weighting (called float-weighted indexing) to properly account for partial government ownership of many large corporations. This method of index weighting contrasts with a price-weighted index, in which all price changes are weighted differently, and a market share-weighted index, which weights only by the number of shares outstanding and not by their value. Major examples of a market value-weighted index include the NASDAQ Composite Index and the Standard & Poor's 500. The latter uses float-weighted indexing to match its calculations more closely with foreign counterparts.
References in periodicals archive ?
Free-Float Adjusted Modified Market Capitalization Weighted Index
The First Trust Composite Closed-End Fund Index is a composite index of the municipal, taxable fixed income and equity indexes which is intended to provide a capitalization weighted representation of the entire U.
Lavine added, "We are pleased that industry analysts, peers and investors are taking note of our challenge to traditional market capitalization weighted indexing.
We believe that more institutions will be embracing our fundamental methodology as an alternative to or a complement to their existing capitalization weighted index positions.
S&P South Africa Composite Property: A market capitalization weighted index that includes all companies in the S&P South Africa Composite that are classified as property companies.
The Morgan Stanley Capital International EAFE Index is a market capitalization weighted index composed of companies representative of the market structure of Developed Market countries in Europe, Australasia and the Far East.
Investors have accepted fundamentally weighted ETFs as a viable alternative to traditional capitalization weighted indexes and ETFs," said Jonathan Steinberg, Chief Executive Officer of WisdomTree Investments.
The Global Realty Majors Portfolio Index is a free-float adjusted, modified market capitalization weighted total return index of selected real estate equity securities.
The Index is a modified market capitalization weighted index of companies primarily involved in the mining for gold and silver and listed on any of the U.
The Amex Gold Miners Index (GDM) is a modified market capitalization weighted index comprised of publicly traded companies primarily in the gold and silver industry.
Component change: Deletion and Replacement Index Name: Cohen & Steers Realty Majors Portfolio Index Index Symbol: RMP Calculation method: Modified Capitalization Weighted Index Deleted component symbol: CUZ Deleted component name: Cousins Properties, Inc.
Component change: Deletion and Replacement Index Name: Cohen & Steers Realty Majors Portfolio Index Index Symbol: RMP Calculation method: Modified Capitalization Weighted Index Deleted component symbol: DDR Deleted component name: Developers Diversified Realty Replacement component symbol: DLR Replacement component name: Digital Realty Trust