Narrow-Based

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Narrow-Based

Generally referring to an index, it indicates that the index is composed of only a few stocks, generally in a specific industry group. See also broad-based.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Narrow-Based

Describing an index that consists of only a few stocks. Generally speaking, a narrow-based index only includes stocks from one industry. These indices are often useful in gauging the performance of the industries they track, but rarely give an indication on movements in the broader economy. See also: Broad-based.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

narrow-based

Of or relating to an index composed of a limited number of securities or securities representing a particular segment of the whole. For example, the Dow Jones Transportation Average is narrow-based because it is composed only of the stocks of transportation companies. Compare broad-based.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
The Commodities Futures Modernization Act of 2000 amended the Commodity Exchange Act to allow trading of futures contracts on individual equity securities and narrow-based indices of equity securities.

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