Sep 29, 2022 11:47 PM - Jack Dalton
Throughout this series about indexes we've explained what indexes are and why they are important. We then went in depth about the S&P 500, the NASDAQ 100, and the Dow Jones. But what about the Russell 3000, the FTSE 100, or the SSE Composite? There are also many unknown stock market indices that have been created to track niche industries to provide a unique opportunity to invest in a niche that you believe in. In this article, we will give you the TL; DR on some of these indices and provide you with the knowledge to find other indices.
As you may well imagine the Russell 3000 tracks… you guessed it 3000 companies. More specifically, it tracks the 3000 largest publicly traded companies in the US stock market denoting size by market capitalization. Hence, it should come as no surprise that like the S&P 500 it is a market capitalization weighted index. Therefore, the value of a company in the index is a product of its share price and relative market capitalization. The objective of this index is to benchmark the entire US stock market and given the companies it follows covers 98% of the US stock market it's fair to say that it meets this objective. The index is maintained and owned by FTSE Russell which is a subsidiary of the London Stock Exchange Group. The index was first launched in January 1984 and it's stock symbol is RUA. There are several limitations of this index. The first is that it's difficult to find 3000 stocks that are practically available with enough interested buyers to truly represent the market. Next, given its size, it is costly for institutions to duly maintain a fund which tracks the index. The last notable criticism is that though it has many stocks, it is undiversified because it is purely domestic (only US stocks). There are two break-ups of the Russell 3000: The Russell 1000 is the largest 1000 stocks in the Russell 3000 and the Russell 2000 which is the next 2000 companies.
The Financial Times Stock Exchange 100 is the first non-US stock index that we have covered. Referred to as the footsie, or FTSE it tracks the 100 largest companies on the London Stock Exchange by market capitalization. As such, many investors look at the FTSE 100 as the index which represents the growth and strength of the UK's economy. Some of the companies it tracks are consumer goods company Unilever, pharmaceutical companies AstraZeneca and GlaxoSmithKline, energy companies Royal Dutch Shell and British Petroleum, and financial institutions HSBC and Barclays. The FTSE 100 is owned and maintained by the FTSE Group which in turn is owned by the London Stock Exchange Group.
The Shanghai Stock Exchange Composite is an index that tracks all A - shares and B - shares that are traded on the Shanghai Stock Exchange. In the past, China A shares were only available for purchase by people and institutions in China but this changed in 2003 with the introduction of Qualified Foreign Institutional Investor (QFII) System. The QFII allowed foreign entities to invest into China A shares but still to this day they are only valued in Chinese Renminbi. B -shares are those which are also valued in foreign currency. The SSE Composite represents the Chinese stock market and therefore enables investors to track the economy of China. However, due to China's recency as a world power the stock markets are still vulnerable to volatility experienced by less mature economies. This volatility serves as a reminder that China is still new to the world of modern finance. One major criticism of the SSE and it's index is that the exchange lacks the type of circuit breakers that the US stock markets have. These circuit breakers are designed to give investors room to breath when huge crashes are underway and can help prevent total collapse. Another reason to be cautious of investing in SSE Composite funds is the lack of institutional investment in the index. Most western stock markets are relatively stable because the majority of trades are done by huge institutions. Most investors of the SSE are individuals which have vastly different risk tolerance than institutions and hence behave differently.
The S&P Global Clean Energy Index provides liquid and tradable exposure to 30 companies from around the world that are involved in clean energy related businesses. The index comprises a diversified mix of clean energy production and clean energy equipment & technology companies. Given the push towards renewable energy that leading economies in the world are striving for, this is an interesting index to follow.
This index tracks is a capitalization index that tracks 30 semiconductor companies. Given the importance of Semiconductor's in technology and specifically technology chips this is a way for people to track companies that are fundamental to the entire tech industry.
This index tracks the performance of the 100 best cryptocurrency coins. It does so using AI integrated with the 9 biggest crypto exchanges to ensure that every second in real time, the 100 best performing coins.
There are many indexes around the world that measure the economic performance of countries and market performance of industries of almost every niche. You can go about finding indexes that track a particular niche that you're interested in by looking up the big stock exchanges and their corresponding indexes. In doing so, you can get a better understanding of how an entire industry or sector is behaving in the current market.
Sep 29, 2022 - Jack Dalton
Stock market research is important to let traders reach the entire performance history of the company in which they are planning to invest or buying stocks for future profitability. This information is crucial and contains the complete library of each listed company's financial performance (encompas...
Sep 5, 2023 - Davit Kirakosyan
HashiCorp (NASDAQ:HCP) reported its Q2 results, with earnings per share (EPS) of ($0.10), which surpassed the Street estimate of ($0.15). The company's revenue stood at $143.2 million, outperforming the Street estimate of $138.22 million. Looking ahead to Q3/24, HashiCorp projects EPS within the ran...
Sep 7, 2023 - Davit Kirakosyan
C3.ai (NYSE:AI) reported fiscal first quarter results on Wednesday that exceeded analysts' expectations, but the software maker now anticipates broader annual losses and no longer expects to achieve profitability in Q4, as it aims to increase investments in generative AI solutions. Following this re...