Indexing

What is 'Indexing'

Indexing is the adjustment of the weights of assets in an investment portfolio so that its performance matches that of an index.

2. Linking movements of rates to the performance of an index.

BREAKING DOWN 'Indexing'

1. Indexing is a passive investment strategy. An investor can achieve the same risk and return of an index by investing in an index fund.

2. Examples of rates that could be linked to the performance of an index are wages or tax rates.

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RELATED FAQS
  1. Is it possible to invest in an index?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
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    There are a few ways to find out what indexes a company is involved in, and investors should take note of them when they ... Read Answer >>
  3. What's the difference between an index fund and an ETF?

    Learn about the difference between an index fund and an exchange-traded fund and how index fund investing compares to value ... Read Answer >>
  4. What are the pros and cons of using the S&P 500 as a benchmark?

    Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
  5. How is the value of the S&P 500 calculated?

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