Securities index

A securities index tracks the performance of a specific selection of shares or bonds. As a rule, these are the most prominent companies listed on the stock exchange in a particular country, geographical region, or sector (e.g., technology).

The index provider specifies the weighting and content of a securities index and follows firmly defined rules. Suppose a company no longer meets these rules. In that case, it is removed from the index, and a suitable company is added to the index.

The DAX, Dow Jones Industrial Average, S&P 500, and MSCI World are well-known indices. MSCI World represents about 1,600 listed companies from 23 industrialized countries. It is considered a kind of leading index for the world economy.