Salomon Brothers World Equity Index (SBWEI)

What Was the Salomon Brothers World Equity Index (SBWEI)?

The Salomon Brothers World Equity Index (SBWEI) was an index that measured the performance of equity securities from both domestic and international markets that consisted of companies with a float of at least $100 million.

This index no longer exists. Salomon Brothers was acquired by Travelers in 1998, which subsequently merged with Citigroup in 1999 where Salomon became Salomon Smith Barney. Then in 2003, Standard & Poor's acquired Salomon Smith Barney's global benchmark index business from Citigroup and retired the SBWEI index.

Key Takeaways

  • The Salomon Brothers World Equity Index (SBWEI) was a global equity index launched in the 1980s.
  • The index tracked more than 6,000 stocks from 22 different countries.
  • The index was shuttered in the early 2000s after S&P acquired the indexing unit of Salomon Smith Barney.

Understanding Salomon Brothers World Equity Index

Salomon Brothers World Equity Index was an index that tracked stocks in publicly traded companies worldwide. The SBWEI included companies in which the total number of shares available for trade was worth at least $100 million.

The SBWEI used a top-down approach when evaluating companies, and each security within the SBWEI index was weighted according to its float. Float refers to the number of a corporation’s shares that are outstanding and available for trading by the public, excluding restricted stock. A stock’s volatility is inversely related to its float. Every company represented in the SBWEI was weighted according to the total value of its shares that are available for trade.

At its height, the SBWEI included securities from more than 6,000 companies located in 22 different countries.

Salomon Brothers: A Brief History

The Salomon brothers were Arthur, Herbert, and Percy Salomon, who founded Salomon Brothers in 1910. Salomon Brothers was one of the largest Wall Street investment banks. Salomon Brothers provided a wide range of financial services and established its name in the financial markets through its fixed-income trading department.

Over the years Salomon Brothers went through many mergers, acquisitions, and changes. In 1981, Salomon Brothers was acquired by Phibro Corporation and became known as Phibro-Salomon. In 1997, the bank merged with Smith Barney, a subsidiary of Travelers Group, to form Salomon Smith Barney. Immediately following the Travelers Group merger, the bank merged with Citigroup, where Salomon Smith Barney served as the investment banking arm. In 2003, Salomon Brothers adopted the Citigroup name.

Many investors regarded Salomon Brothers as one of the most elite multinational investment banks. The financial institution was part of what was known as the bulge bracket, which includes the companies in an underwriting syndicate. Bulge bracket is also a term for the most profitable multi-national investment banks in the world whose banking clients are normally large, influential institutions, corporations, and governments.

Author Michael Lewis documented the Salomon Brothers' rise and fall in his 1989 book, Liar's Poker. Lewis’s book goes into detail about the high-pressure bond trading culture at Salomon Brothers, which has inspired the popular view of Wall Street in the 1980s and 1990s as a ruthless playground for those in reckless pursuit of profit.

Article Sources
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  1. U.S. Securities and Exchange Commission. "Salomon Smith Barney Holdings Inc., Form 10-Q, June 30, 1999," Pages 8-9. Accessed Aug. 27, 2021.

  2. S&P Global. "S&P Dow Jones Indices." Accessed Aug. 27, 2021.

  3. NASDAQ. "Salomon Brothers World Equity Index (SBWEI)." Accessed Aug. 27, 2021.

  4. Federal Reserve Bank of New York. "Primary Dealers List." Accessed Aug. 27, 2021.

  5. Michael Lewis. “Liar's Poker.” W.W. Norton. 1989.

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