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. 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.
  2. 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.
  3. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  4. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  5. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  6. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
Trading Center