Blue-Chip Index

AAA

DEFINITION of 'Blue-Chip Index'

A stock index that tracks the shares of the top-performing publicly traded companies. Blue-chip stocks represent companies that are financially stable, well established and provide good returns for investors, making them desirable investments. Because blue-chip companies tend to perform similarly to the economy as a whole, the performance of a blue-chip index may be considered a gauge of an industry's or region's economic strength. It is for this reason that news reports typically mention how a major blue-chip stock index, such as the Dow Jones Industrial Average (DIJA), performed that day.

INVESTOPEDIA EXPLAINS 'Blue-Chip Index'

Rather than selecting individual stocks, an investor can gain exposure to a variety of blue-chip stocks by purchasing shares of an exchange-traded fund or index fund that tracks a blue-chip index. Besides the DJIA, other examples of blue-chip indexes include the NTX, which tracks 30 of the top stocks traded in central, eastern and southeastern Europe, and the DAX, which tracks the top 30 companies on the Frankfurt Stock Exchange.

RELATED TERMS
  1. Blue Chip Indicator

    A formal gauge or measure of the performance of a selected group ...
  2. Blue Chip

    A nationally recognized, well-established and financially sound ...
  3. Blue-Chip Stock

    Stock of a large, well-established and financially sound company ...
  4. Dow Jones Industrial Average - ...

    The Dow Jones Industrial Average is a price-weighted average ...
  5. Standard & Poor's 500 Index - S&P ...

    An index of 500 stocks chosen for market size, liquidity and ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value ...
RELATED FAQS
  1. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  2. What is the difference between shares outstanding and floating stock?

    Shares outstanding and floating stock are different measures of the shares of a particular stock. Shares outstanding is the ... Read Full Answer >>
  3. What are the drawbacks of a small investor buying blue-chip stocks?

    Blue-chip stocks are generally safer for investors. However, their drawbacks for small investors include moderate growth ... Read Full Answer >>
  4. What is the difference between market risk premium and equity risk premium?

    The only meaningful difference between market-risk premium and equity-risk premium is scope. Both terms refer to the same ... Read Full Answer >>
  5. What is the difference between the QQQ ETF and other indexes?

    QQQ, previously QQQQ, is unlike indexes because it is an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index. The ... Read Full Answer >>
  6. What is the difference between an investment and a retail bank?

    The activities and types of clients for an investment bank versus those for a retail bank highlight the primary difference ... Read Full Answer >>
Related Articles
  1. Investing Basics

    The Alphabet Soup Of Stocks

    Are the countless stock categories leaving you puzzled? Here we help you sort through the confusion.
  2. Markets

    Understanding Small- And Big-Cap Stocks

    If you don't realize how big small-cap stocks can be, you'll miss some good investment opportunities.
  3. Active Trading Fundamentals

    Tips For Controlling Investment Losses

    A profit/loss plan helps investors recognize mistakes and invest logically, rather than emotionally.
  4. Active Trading

    Sorting Out Cult Stocks

    Is that crazy product going to be the next big thing? Learn how to evaluate these companies here.
  5. Entrepreneurship

    Do "Widow And Orphan" Stocks Still Exist?

    Is there such a thing as a safe stock providing high dividend income? It may be time to redefine the terms "widows" and "orphans."
  6. Term

    How Equity Capital Markets Work

    An equity capital market is a market existing between companies and financial institutions that raises money for the companies.
  7. Chart Advisor

    Looking To The Mega Caps For Strength

    Increased volatility is making it difficult to find areas of strength in the market. Even utilities are breaking below key support levels. The mega caps could be the answer.
  8. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Germany

    Learn about iShares MSCI Germany, which is a nondiversified exchange traded fund that invests principally in large-cap German companies.
  9. Mutual Funds & ETFs

    Top 3 ETFs For Investing in China

    Discover the top three China ETFs. Chinese stocks tend to be quite volatile, presenting opportunities for savvy investors, given the country's high growth rate.
  10. Mutual Funds & ETFs

    ETF Analysis: Health Care Select Sector SPDR

    Learn about the Health Care Select Sector SPDR Fund including its performance, current holdings, recent performance and the outlook for the ETF.

You May Also Like

Hot Definitions
  1. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  2. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  3. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  4. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  5. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  6. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!