Major World Stock Market Indexes explained by professional forex trading experts the “ForexSQ” FX trading team.
Major World Stock Market Indexes
Stock market indexes measure the value of a section of a country’s stock market via a weighted average of selected stocks. These indexes help investors and analysts describe the market and compare different investments. Many mutual funds and exchange-traded funds (ETFs) attempt to track these indexes to provide investors with exposure to a given market. The three most common types of indexes are ‘global’ indexes, ‘regional’ indexes, and ‘national’ indexes.
In this article, we will look at global stock market indexes, regional stock market indexes, and national stock market indexes around the world, as well as some important considerations for investors looking to gain exposure using these indexes.
Global Stock Market Indexes
Global stock market indexes track equities from all around the world. For example, the MSCI World Index tracks large and mid-cap equities across 23 developed countries covering approximately 85% of the free float-adjusted market capitalization in each country. It’s worth noting that global stock market indexes weighted by market capitalization don’t offer exposure to emerging markets or frontier markets since they’re too small for inclusion.
The most popular global stock market indexes include:
MSCI World Index
FTSE All-World Index
S&P Global 100 Index
S&P Global 1200 Index
Dow Jones Global Titans 50
Russell Global Index
Regional Stock Market Indexes
Regional stock market indexes track equities from specific regions around the world.
For instance, these indexes may cover Asian, European, or Latin American equities. They help investors and analysts compare the performance of specific countries to a general region to highlight what assets are over- and under-performing. The funds tied to these indexes may also be helpful in building exposure to specific regions of the world.
The most popular regional stock market indexes include:
S&P Asia 50 Index
Dow Jones Asian Titan 50 Index
FTSE ASEAN 40 Index
Euro Stoxx 50 Index
FTSE Euro 100 Index
S&P Europe 350 Index
S&P Latin America 40 Index
National Stock Market Indexes
National stock market indexes provide exposure to individual countries. In some cases, the equities in these indexes will consist entirely of large-cap stocks, similar to the Dow Jones Industrial Average in the United States. In other cases, the equities may be considered small-cap since the country may not have many large companies. This is often the case in emerging market and frontier market economies.
The top ten national stock market indexes include:
SSE Composite Index
SZSE Component Index
CSI 300 Index
Nikkei 225 Index
JPX-Nikkei 400 Index
DAX 30 Index
FTSE 100 Index
FTSE All-Share Index
FTSE techMark Index
CAC 40 Index
CAC Next 20 Index
CAC Mid 60 Index
Bombay Stock Market Index
National Stock Exchange of India Index
MCX Stock Exchange Index
FTSE MIB Index
FTSE Italia Mid Cap Index
Bovespa Stock Index
IBrX Stock Index
ITEL Stock Index
S&P TSX 60 Index
S&P TSX Composite Index
S&P TSX Venture Composite Index
Other Stock Market Indexes
There are many other types of specialized stock market indexes for certain demographics. For example, the S&P Islamic Index and Shariah indexes are geared towards investors adhering to Islamic laws, while other indexes cater towards goals like Environmental-Social-Government (or ESG) investments. Investors may want to consider these types of indexes, which may also provide exposure to global stocks with certain restraints.
Some popular alternative stock market indexes include:
S&P Global BMI Shariah Index
Stoxx Global ESG Leaders Index
Invest in Stock Market Indexes
Investors can build exposure to these stock market indexes into their portfolios using mutual funds or exchange-traded funds that track the underlying index.
For example, the iShares MSCI World ETF (URTH) tracks the popular MSCI World Index and provides exposure to global stock markets.
When evaluating mutual funds and ETFs, investors should consider a variety of different factors, including the fund’s expense ratio, diversification, and other factors.
Major World Stock Market Indexes Conclusion
Global stock market indexes help investors and analysts describe the market and compare different investments. There are three types of stock market indexes, including global stock market indexes, regional stock market indexes, and national stock market indexes. Investors can leverage these indexes to gain exposure to international stock markets using mutual funds or exchange-traded funds tied to these indexes.
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