FTSE RAFI US 1000 Index

AAA

DEFINITION of 'FTSE RAFI US 1000 Index'

An index of stocks based on the largest 1,000 fundamentally ranked companies. The FTSE RAFI US 1000 Index was launched on November 28, 2005 as part of FTSE Group's non-market cap weighted stocks. The fundamental weighting factors include dividends, book value, sales and cash flow.

INVESTOPEDIA EXPLAINS 'FTSE RAFI US 1000 Index'

The FTSE RAFI US Index tries to reduce the exposure to overvalued stocks. This is especially true for stocks that have recently seen a seemingly unsustainable increase in price. For example the index will have less exposure to stocks that have seen large increases in price compared to their earnings (called P/E ratio). This lower exposure is compared to a market-cap weighted index.

RELATED TERMS
  1. FTSE NASDAQ 500 Index

    Introduced in July 2005, the FTSE NASDAQ 500 is one of four indexes ...
  2. Fundamentally Weighted Index

    A type of equity index in which components are chosen based on ...
  3. Market Index

    An aggregate value produced by combining several stocks or other ...
  4. Capitalization-Weighted Index

    A type of market index whose individual components are weighted ...
  5. Price-Weighted Index

    A stock index in which each stock influences the index in proportion ...
  6. Subindex

    A group of securities that are part of a larger classification, ...
Related Articles
  1. Mutual Funds & ETFs

    The Hidden Differences Between Index Funds

    These funds don't all match index returns. Find out how to avoid costly surprises.
  2. Mutual Funds & ETFs

    Benchmark Your Returns With Indexes

    If your portfolio is always falling short, you may not be making an apples-to-apples comparison.
  3. Options & Futures

    The Lowdown On Index Funds

    If you can't beat the market, why not join it? Read on to go over your options.
  4. Economics

    The ABCs Of Stock Indexes

    Indexes can track market trends, but they're not always reliable. Can you trust them?
  5. Mutual Funds & ETFs

    Index Investing

    Get to know the most important market indices and the pros and cons of investing in them.
  6. Investing Basics

    What is the Stock Market?

    A stock market is where shares in corporations are issued and traded. Stock markets are key components of a free market economy.
  7. Investing

    Commercial Paper

    Commercial paper is a short-term debt security issued by financial companies and large corporations. The corporation promises the buyer a return, or profit, for making the loan. The return is ...
  8. Investing Basics

    Why Do Penny Stocks Fail?

    Penny stocks are speculative and highly risky investments. Lack of government and stock exchange oversight and general information leaves penny stock investors open to sudden losses.
  9. Active Trading

    What's a Marketable Security?

    Marketable securities are financial instruments that can be readily bought and sold in a public market. The key feature is the ease with which it can be sold and converted into cash. Usually, ...
  10. Stock Analysis

    Buyinb Facebook Stock, A Beginner's Guide

    This straightforward guide helps the novice investor feel more adept at buying a stock, such as Facebook (FB).

You May Also Like

Hot Definitions
  1. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  2. 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 ...
  3. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  4. 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 ...
  5. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  6. 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 ...
Trading Center