Market value-weighted index

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Market value-weighted index

An index of a group of securities computed by calculating a weighted average of the returns on each security in the index, where the weights are proportional to outstanding market value.

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 ?
The 50 constituents of the Alerian MLP Index will be rebalanced on a float-adjusted, capitalization-weighted basis in accordance with the existing index methodology.
The two are the TOPIX 1000 and the Tokyo Stock Exchange Mothers Index, both of which are market capitalization-weighted indexes, the TSE said.
The exchange said a contract it has signed with Morgan Stanley ''aims to meet the strong demand for a hedging and investing instrument that is based on a globally recognized, capitalization-weighted index, which reflects the sectoral diversity of the Japanese equity markets.
Shift underscores increased investor interest in Fundamental Index strategies to complement market capitalization-weighted approaches
The constituents of the index will be rebalanced on a capped, float-adjusted, capitalization-weighted basis in accordance with the existing index methodology.
The index's modified capitalization-weighted approach and qualitative screening process emphasize companies that the Cohen & Steers Index Committee believes are leading the securitization of real estate in the United States.
The Janney Global Water Index(SM) is a capitalization-weighted, float-adjusted index of the most prominent water stocks in the world.
The S-Network Global Gaming Index is a modified capitalization-weighted, float adjusted index of the most prominent pure-play gaming industry stocks in the world.
The Stowe Global Coal Index is a modified capitalization-weighted, float adjusted index of 40 of the most prominent pure-play coal industry stocks in the world.
In contrast to capitalization-weighted indexes, the WisdomTree Indexes anchor the initial weights of individual stocks to a measure of fundamental value.
COLUMBUS, Ohio, May 13, 2015 /PRNewswire/ -- The Diamond Hill Valuation-Weighted 500 ETF (NYSE: DHVW), a new Exchange Traded Fund (ETF) that uses an intrinsic value capitalization approach to track an index seeking to outperform traditional broad-based market capitalization-weighted index funds, was launched May 12, 2015 by Diamond Hill Capital Management, Inc.
The Realty Majors Portfolio Index is a free-float adjusted, modified market capitalization-weighted total return index of selected real estate equity securities.