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What is a world index?
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A world index is a stock market index that tracks the performance of shares from companies across many different countries. It provides a broad overview of how global equity markets are performing. By combining companies from multiple regions, a world index reflects general trends in the international economy.
World indices help investors understand the overall direction of global stock markets.
Unlike national indices that track companies from a single country, a world index includes companies from various economies and sectors. Well known examples include indices that follow companies from North America, Europe and Asia. Because of this broad coverage, a world index is often used as a benchmark for global equity performance.
Investors also use world indices as the basis for investment funds and ETFs that aim to provide diversified exposure to global markets. By investing in such products, investors can gain access to a large number of international companies through a single investment.
Short example:
Suppose a world index tracks 1,500 companies from different countries. If many of these companies increase in value, the index will rise as well.
If global markets weaken and many companies decline in price, the value of the world index will fall.
Disclaimer: Investing brings risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. Therefore, they are for educational purposes only.
