Few investment tools have had such implicit, long-lasting trust heaped upon them as the humble, well-worn index. Forming part of the fund management architectural design process, indices serve as a vital instrument with which to measure performance, select stocks and build portfolios, and with which to model active investment strategies.
Elsewhere, they form the backbone of packaged products, such as exchange traded funds (ETFs) and tracker-funds, providing investors with exposure to markets they could not otherwise access. More broadly, they serve as a barometer by which investors, fiscal policy-makers, politicians and economists gauge the mood of the market and the economy at large, and upon which they make fundamental, long-lasting decisions.
