What Is the Salomon Brothers World Equity Index?
Saloman Brothers World Equity Index (SBWEI) is an index that measures the performance of fixed-income and equity securities from domestic and international markets that consist of companies with a float of at least $100 million.
Understanding Salomon Brothers World Equity Index
Salomon Brothers World Equity Index is an index that tracks both stocks and debt securities in publicly-traded companies worldwide. The SBWEI includes companies in which the total number of shares available for trade is worth at least $100 million. The SBWEI uses a top-down approach when evaluating companies, and each security within the SBWEI index is 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 is weighted according to the total value of its shares that are available for trade.
The SBWEI includes securities from more than 6,000 companies located in 22 different countries
The Salomon Brothers
The Salomon Brothers World Equity Index is named after 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’ 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.