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 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. Stock Analysis

    How You're Probably Using a 3M Product Right Now

    3M specializes in businesses in which few aspiring entrants have neither the patience nor the capital to build market share.
  7. Investing Basics

    What's a Blue-Chip Stock?

    A blue-chip stock is stock of a company that has been operating successfully for many years and has a market capitalization in the billions. Most blue-chip companies are leaders in their industry. ...
  8. Trading Strategies

    General Electric: Good News/Bad News

    General Electric is generous to its shareholders, but that's not the only factor to consider.
  9. Investing

    What does "Blue Chip" Mean?

    Describing a business as “blue chip” comes from the game of poker, where blue chips are the most valuable.
  10. Chart Advisor

    Time To Rebalance? These ETFs Say So

    Caution ahead: 2014 has been very good to U.S. large-cap indexes, but lagging commodities and funds holding mid- to small-caps point to a slowdown.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center