How Popular Market Indexes Are Constructed with Athanasios Psarofagis
Excess ReturnsNovember 22, 202300:54:40

How Popular Market Indexes Are Constructed with Athanasios Psarofagis

Most investors reference the returns of popular indexes frequently. But most also do not understand the details of how those indexes are constructed. In this episode, we take a deep dive into index construction with Bloomberg's Athanasios Psarofagis. We start with basic indexes like the S&P 500 and NASDAQ and move to more complex ones like the Russell and S&P value and growth indexes. But in all cases, we look at the behind the scenes details of how the index is built and how that impacts the returns they generate for investors.

#sp500 #nasdaq100 #dowjones #bloomberg

00:00 - Intro
02:40 - The importance of understanding index construction
07:36 - Breaking down the ETF landscape
10:21 - How the S&P 500 is constructed
17:57 - How the Dow Jones Industrial Average is constructed
19:41 - How the NASDAQ 100 is constructed
22:17 - The Russell 2000 vs. The S&P Small-Cap 600
25:26 - How the Russell and S&P value and growth indexes are constructed
32:38 - Anathasios' due diligence process for evaluating ETFs
37:44 - How international equity indexes are constructed
42:01 - How the Bloomberg Aggregate Bond Index is constructed
46:55 - ETFs that go beyond stocks and bonds
52:09 - The one lesson Athanasios would teach the average investor

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