Capitalization-Weighted Index

(redirected from Capitalization Weighted)

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 ?
who are looking for the value our platform provides, particularly as we continue to accelerate our business activities globally' said Tyler Robson, CEO of Valens THCX tracks the Innovation Labs Cannabis Index, which is a modified market capitalization weighted index, with a portfolio of 36 stocks that are expected to benefit from growth of the legal marijuana, CBD and hemp industries.
Since inception, the ETF outperformed incumbents tracking market capitalization weighted CSI300 benchmark by 0.31% and posted 69% growth in new inflows.
The index is a rules-based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of companies involved in video gaming and eSports.
The SEC also believes that a higher public ownership would increase the free float market capitalization and enhance the Philippines' relative weight in globally tracked free float-adjusted market capitalization weighted indices.
KOSPI 200 Index ETF, which composes of 200 constituent stocks of the KOSPI with greater capitalization, is constructed by KRX and belongs to the market capitalization weighted stock index.
SEE LinX is a market capitalization weighted index adjusted for the free-float of each constituent, while SEE LinX EWI is an equally weighted index with the same constituents.
BMO Low Volatility International Equity Hedged to CAD ETF (Ticker: ZLD): This ETF is designed for investors looking to invest in international equities with greater downside protection than market capitalization weighted products.
In this approach, proposed by Zaremba (2015a), the global market portfolio comprises all the country portfolios within the capitalization weighted sample.
Net Portfolio Investment (NPI) has been taken as dependent variable whereas market capitalization weighted average rate of return on deposit trade openness broad money (M2) one period lagged dependent variable and Foreign Direct Investment (FDI) have been taken as independent variables.
They argue that the fundamental index is a more efficient indexation method compared to the market capitalization weighted index method.
As a result of that, the regular reconstruction and rebalancing of equal or capitalization weighted portfolios may be completely unrealistic.
The S&P AFE 40 uses a capped market capitalization weighted index scheme, where the maximum weight of any constituent cannot exceed 10 percent of the index and the maximum weight for each country, based on domicile, cannot exceed 35 percent.