Constituent
Definition of 'Constituent'A single member of an index. A constituent is typically a stock or company that is part of a larger index such as the S&P500 or Dow Jones Industrial Average. The aggregate of all the constituents make up the index, and generally each constituent has to meet the requirements and be selected to be included in the index. |
|
Investopedia explains 'Constituent'For example, to become a constituent in the S&P500, a stock has to meet certain requirements with regard to market cap, market exposure, liquidity, etc. Indexes also periodically review their constituents to make sure they are meeting the minimum requirements, and if they don't, the index may remove the constituents from the index. This can negatively affect the constituents' reputation with investors. |
Related Definitions
Articles Of Interest
-
An Introduction To Stock Market Indexes
Be in the know - learn about the five most talked about indexes and what makes them all different. -
The ABCs Of Stock Indexes
Indexes can track market trends, but they're not always reliable. Can you trust them? -
How Now, Dow? What Moves The DJIA?
Find out how this index tracks market movements - and where it falls short. -
Volatility Index Uncovers Market Bottoms
VIX can gauge when the market has hit bottom - a welcome sign of better things to come. -
Affordable ETF Alternatives
Due diligence should be conducted in knowing the different costs related to ETFs before undertaking an investment in one. The return you get from an ETF investment is dependent on cost factors ... -
5 Tips For Diversifying Your Portfolio
A diversified portfolio will protect you in a tough market. Get some solid tips here! -
3 Essential Rules For New Investors
Find out how beginner investors can invest sensibly, suitably and simply. -
Using ETFs To Build A Cost-Effective Portfolio
ETFs are a viable alternative to mutual funds, but before you invest, there are a few things you should know. -
What is a stock ticker?
A stock ticker is a report of the price for certain securities, updated continuously throughout the trading session by the various stock exchanges. A "tick" is any change in price, whether that ... -
Active Management: Is It Working For You?
There are guidelines to be followed when comparing an actively-managed investment strategy with a benchmark.
Free Annual Reports