Direct Answer

A stock market index is a rule-based measurement of a defined group of shares, maintained by an index provider that publishes the rules in a methodology document. The index itself owns nothing: it is a number produced by applying a weighting formula to a selected list of companies, recalculated as prices move and revised on a published schedule.

Why the machinery matters

Indexes are the vocabulary of markets. A move in the S&P 500 is quoted as though it were the market itself, and a fund tracking it is often described as passive, which suggests no decisions are being made. Both readings hide the machinery. Somebody wrote the eligibility rules, somebody chose the weighting, and somebody decides when a company enters or leaves. This section explains that machinery, index by index and concept by concept.

What an index actually is

An index has three moving parts: a universe, a selection rule, and a weighting method. The universe is the pool of eligible securities, usually defined by listing venue, domicile, size and liquidity. The selection rule picks from that pool, either mechanically by rank or, in some cases, by a committee applying published criteria. The weighting method decides how much each selected company contributes to the number.

Everything that makes one index behave differently from another comes from those three choices. Two indexes covering the same market can diverge for years because one caps single-stock weight and the other does not, or because one screens for profitability and the other does not.

Weighting methods and what each one does

Price weighting sets each company's influence by its share price alone. A company trading at $500 moves the index ten times as much as one at $50, regardless of which is the larger business. That is why a price-weighted index is sensitive to stock splits: a split changes the share price without changing the company, and the index divisor has to be adjusted so the split does not register as a fall.

Market-capitalisation weighting sets influence by company size, so the largest holdings dominate. Float adjustment refines this by counting only shares available to public investors, excluding blocks held by founders, governments or cross-holdings. Without float adjustment, a company whose shares are 80% locked up would carry weight the market cannot actually trade.

Equal weighting gives every constituent the same share, which removes size bias and mechanically tilts toward smaller companies. It also requires regular rebalancing, because prices immediately push the weights apart again. That rebalancing is a real cost and a real source of turnover.

Reconstitution and why it moves prices

Reconstitution is the scheduled revision of an index's membership. Companies that no longer meet the eligibility rules leave; companies that now qualify enter. Because a large amount of money tracks major indexes, the funds doing that tracking must buy the additions and sell the deletions to keep matching the index.

That creates predictable, dated demand for a known list of stocks, which is why index events have their own trading literature. The effect is a mechanical consequence of how tracking works, not a judgement about whether the added company is a good investment.

Concentration is a property of the method, not a market opinion

A capitalisation-weighted index concentrates automatically when a few companies grow faster than the rest. No decision is taken to increase their weight; the weighting formula does it as prices move. An investor holding a broad cap-weighted index during such a period is holding a steadily less diversified portfolio without having changed anything.

This is measurable rather than a matter of opinion, and it is worth measuring rather than assuming. The concentration and breadth guides linked below cover how.

What Swoopr publishes here, and what it does not

Index names, levels, history and methodology are facts, and this section explains them freely. Constituent lists with weights are a different matter: every major provider licenses that dataset, and Swoopr holds no such licence. So each index page links to the provider's own current-constituents page rather than reproducing it.

That is a deliberate boundary and it is enforced in code rather than left to editorial memory. An index record carries explicit data rights, and the build refuses to publish constituent rows for any index whose rights are not recorded as granted.

Indexes by region

Frequently Asked Questions

Is an index the same thing as a fund?

No. An index is a calculated number and holds nothing. A fund is a pooled investment vehicle that may aim to track an index by holding its constituents. The index provider and the fund manager are usually different companies, and the fund pays the provider to license the index.

Why does the Dow Jones Industrial Average move differently from the S&P 500?

They weight differently. The Dow is price weighted, so a company with a high share price has more influence regardless of its size. The S&P 500 is float-adjusted capitalisation weighted, so influence follows the tradable value of the company. The two can disagree on any given day purely because of that difference.

What does float adjustment mean?

It means the index counts only the shares actually available to public investors, excluding blocks held by founders, governments, or other companies. The intent is that an index weight reflects what the market can trade rather than the full share count on paper.

Why do stocks move when they are added to an index?

Funds tracking that index have to buy the addition to keep matching it, and the date is known in advance. That creates concentrated, predictable demand. It is a mechanical consequence of index tracking rather than a signal about the company.

Does Swoopr publish index constituent lists?

No. Index providers license constituent data, and Swoopr holds no such licence. Each index page links to the provider's own page for current membership and weights.