From the UK\u2019s FTSE 100 to the US\u2019s Dow Jones, chances are that even those new to investing will have come across some of the world\u2019s leading stock market indices. We\u2019ve explained how they work and summarised the key stock market indices in the UK and globally.<\/p>
Stock market indices are effectively virtual portfolios of pre-selected stocks that allow investors to get a sense of how an economy, or a subset of that economy, is performing. An index acts as a barometer of the state of a market and enables investors to track the ups and downs of the selection of stocks within it. An index can contain anything from less than 50 to several thousand stocks.<\/p>
There are a few types of stock index. Some of the mains ones are:<\/p>
The same stock can feature in more than one index. And some indices track stocks across more than one stock exchange. The Dow Jones<\/a>, for example, includes stocks listed on both the New York Stock Exchange<\/a> (NYSE) and the Nasdaq<\/a>.<\/p> Almost as important as the stocks that make up an index is the impact each stock can have on the index\u2019s performance \u2013 known as weighting. Some of the main weighting methods are:<\/p> There are 60 stock exchanges worldwide and millions of stock indices, so listing them all here would make for a pretty long article (we suspect we might test the word limit for our website). But we\u2019ve rounded up the main UK and international stock indices you will likely encounter.<\/p> There are around 20 stock indices based on the London Stock Exchange, including the main market and the AIM market, home to small and medium-sized growth companies. Key indices include:<\/p> There are a few ways to get exposure to stock market indices.<\/p> For all of these types of trading, you\u2019ll need to sign up for a broker or online investment platform<\/a> to access the stock markets and relevant indices you\u2019re interested in. If you want to buy international stocks, make sure that your chosen provider has access to the relevant stock exchange. Investing in international index funds might be a bit more straightforward, as many providers offer access to a wide range of globally focused funds.<\/p>\n\n\n\n\nHow are stock market indices weighted?<\/h3>
What are the main stock market indices?<\/h3>
Main UK stock market indices<\/h4>
Main US stock market indices<\/h4>
Other leading international stock indices<\/h4>
How can I invest in a stock market index?<\/h3>