What is an index and how is it used?
An index is the combined value of a group of securities that’s used as a benchmark by investors to measure the performance of their own investment portfolios. An index works on the assumption that a sample of securities will replicate the whole market for those securities.
Examples of indexes include the NZX-50 – which replicates the performance of the New Zealand Stock Exchange’s 50 largest stocks, and the Dow Jones Industrial Average (DJIA) – which replicates the performance of 30 major stocks traded on the New York Stock Exchange and the Nasdaq.
Index tracking, also known as ‘passive management’, is an investment strategy that tracks the performance of an index. It involves investing in most or all of the securities within an index with the aim of maximising diversification, reducing risk and volatility, and improving returns over the long term.
Index tracking is generally less risky than the ‘active’ way of investing (where investors actively buy and sell stocks) and, because of its passive nature, the management fees for a passively-managed fund can also be lower.
Find out more about Exchange Traded Funds.
ASB's online security policy is to take every practical step possible to keep your accounts secure. Like our other services, ...
That depends on whether or not you are an existing ASB customer and what type of account you would like; ...
No, but we recommend you do become one. It's free to join and it may make things easier for you as we can keep you informed about the latest share offers and market news.
Effective from 1 May 2017 ASB Securities has discontinued offering the option to participate in Foreign Dividend Reinvestment Plans (DRP) ...
ASB Securities office hours are 7am to 6pm NZ time Monday to Friday. NZX trading hours are between 10am to ...