Last time I described how ETFs track their underlying indices. I made my point using this chart that compares 10-year performance of the most liquid SPY ETF (red) and the underlying S&P 500 index (blue)… You can find the whole article HERE.
I described how ETFs are a convenient way to trade an index, for example the S&P 500. The question is, how good is ETF in tracking the underlying index? Well, it’s damn good! Take a look at the next chart which is comparing price of the S&P 500 index (blue, left axis) and the derived […]
My last article was about indices and how they can be useful as a performance gauge. However, their scope of use is much broader. Quite a lot of money is invested according to an index. This approach has acquired its own name: Index investing or Passive investing. Index itself is not tradeable. It’s just an […]
Index is a time series describing change in value of some underlying assets. For example the widely known S&P 500 index tracks performance of the 500 largest US stocks. There are cap weighted indices where each stock in the index has a weight proportional to its market cap, sometimes adjusted for free float… You can […]