Underlying Index

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Underlying Index

An index tracked by an investment vehicle. For example, an exchange-traded fund may track every stock traded on the New York Stock Exchange. In this case, the underlying index is the NYSE Composite.
References in periodicals archive ?
M2 EQUITYBITES-October 1, 2018-BlackRock declares changes to underlying indexes of two iShares ETFs
Global Banking News-October 1, 2018-BlackRock declares changes to underlying indexes of two iShares ETFs
As part of Monday's ETF announcement, State Street will be replacing the underlying indexes for three stock market ETFs, substituting its own proprietary SSGA indexes for indexes from Russell Investments, starting Nov.
In September of 2015, John Hancock Investments launched six strategic beta John Hancock Multifactor ETFs, with underlying indexes designed by Dimensional Fund Advisors LP, a company regarded as a pioneer in strategic beta investing.
As with the six ETFs that John Hancock Investments launched in September 2015, Dimensional Fund Advisors LP--a company regarded as one of the pioneers in strategic beta investing--was selected to design the underlying indexes for the five new sector funds, based on Dimensional's time-tested factor-based approach.
Before investing in a strategic beta strategy, investors should understand the weighting methodologies, underlying indexes, sector allocations, market capitalizations and value-growth tilts it uses, and should keep in mind that portfolio characteristics will change over time.
In a nutshell investors must look to the underlying indexes on which these funds are based and determine whether they represent the latest fad or a sound research-based way of approaching a defined segment of the equity market.
Structured notes appeal to some wealth managers because they will always outperform their underlying indexes in a down market, due to the downside buffer, and will outperform a rising market if the market increase is less than the cap.
Growth caps are not applied to the individual underlying indexes prior to the hindsight and overweighting calculation.
Components of the underlying indexes have been selected by Dow Jones Indexes based on float-adjusted market capitalisation, revenue, and net profits.
TSE said it hopes the 17 new indexes will be utilized in the future as the underlying indexes for financial products such as exchange traded funds.