Security Market Indicator Series - SMIS

Definition of 'Security Market Indicator Series - SMIS'


An index that uses the performance of a sampling of securities to represent the performance of a market segment or overall market. The security market indicator series assumes that the performance of a statistically valid set of securities will reflect the performance of a larger set of securities. Its purpose is to give investors a general idea of the way a larger segment of the market performs in aggregate.

Investopedia explains 'Security Market Indicator Series - SMIS'


Security market indicator series are often used in benchmarking. For example, an analyst may compare a security considered high growth to a sampling of similarly labeled securities to determine if the security performs better or worse than its peers.

SMIS may also be used in the creation of index funds, which are designed to follow the performance of a much larger market. Because the SMIS is an approximation for the performance of a larger segment, an index that follows the S&P 500, for example, will not have the same return as the overall S&P 500 index.

While SMIS can be used to determine the performance of a larger market segment, it can also be used to compare the performance of a money manager to the overall market performance. Because money managers charge fees, it is helpful for investors to determine whether those fees are warranted by performance. Ideally the money manager will outperform the market once fees are taken into account.



comments powered by Disqus
Hot Definitions
  1. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  2. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  3. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  4. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  5. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  6. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
Trading Center