Frequently Asked Questions - Euronext indices

Euronext indices

Frequently asked questions about our Euronext stock indices

What is a stock index?

An index is an economic performance indicator for a sample of securities that represents a region, a country, a strategy, a theme or an economic sector. The most representative and frequently traded stocks are usually selected to form the index. Euronext creates, manages and promotes a broad range of indices.

Regardless of whether it represents the market as a whole, or a specific sector or a basket of specific stocks, an index is an essential portfolio management tool.

It is also a platform for promoting the investment universe it represents to the financial community – investors, fund managers and analysts.

For many indices, stock selection depends on liquidity. A stock’s weighting in an index is usually calculated based on its total market capitalisation and its market float (percentage of capital in public ownership).

Are there different types of stock indices?

Euronext calculates different type of stock indices (regional indices, national indices, theme indices, strategy indices and sector indices).

What are “national indices”?

National indices are indices that contain the companies with the highest market capitalisation and the most actively traded shares within a certain country. Euronext Indices notably include the following blue-chip national indices:

  • AEX-index® - The 25 largest stocks on Euronext Amsterdam.
  • BEL 20® - The 20 largest Belgian stocks traded on Euronext Brussels.
  • CAC 40® - The 40 largest and most traded stocks on Euronext Paris.
  • PSI 20® - The 20 largest stocks on Euronext Lisbon.
What are “regional indices”?

Regional indices are indices that cover a certain geographical area of the world. They may be global indices comprising stocks from all over the world, European indices that contain only European stocks, or for example an Iberian Index that only contains stocks from Spain and Portugal. Examples include:

  • Euronext Vigeo® World 120 - The Euronext Vigeo World 120 is composed of the 120 highest ranking worldwide listed companies as evaluated by the Vigeo agency in terms of their performance in corporate responsibility.
  • Euronext IEIF REIT Europe Index® - The Euronext IEIF REIT Europe Index contains companies listed on European regulated markets that have opted for a tax-transparency regime (REIT Structure); selection is based on market capitalization, free float and daily average turnover
What are “strategy indices”?

Strategy indices reflect the performance of a rule-based investment strategy. These rules may involve for instance dividend yield, equal weighting or risk analysis, with examples including:

  • AEX® and CAC® - Low Risk Indices - Companies are selected based on a liquidity and risk characteristics screening.
  • AEX® and CAC® - Equal Weight Indices - These indices have the same composition as the national Indices but are equally weighted on the review dates.
What are “theme indices”?

Theme indices are indices that follow a specific theme, for example emerging markets, alternative energy or CO2 emissions. Examples are:

  • Low Carbon 100 Europe Index® - The European companies that have the lowest carbon intensity are selected into the index. 30 Frequently Asked Questions
  • Euronext Family Business Index® - Euronext has created the first European Index dedicated to family businesses, the Euronext Family Business®, intended to promote performance of listed family businesses in a long term, independently of their size or sector.

It is composed by 90 listed values on all Euronext market, including:

  • 30 stocks from the large category (compartment A),
  • 30 stocks from the medium category (compartment B),
  • 30 stocks from the small category (compartment C and Euronext Growth).
What are “sector indices”?

On each Euronext market, specific indices have been created on the basis of a sample of stocks that operate in the same sector: real estate, manufacturing, consumer goods, health, telecoms, financial, technology etc. These indices make it possible to monitor developments in a sector and to compare it to another market.

How can my company join an index on the Euronext market?

All companies listed on Euronext are reviewed for eligibility for index inclusion; however, inclusion in an index depends on objective criteria such as free float, number of stocks traded, etc. As such, inclusion in any given index is discretionary to Euronext. It is not necessary to apply for inclusion in an index, nor can a company oppose its inclusion. If a company’s situation changes, in terms of criteria, its stock may be removed from an index. The decision to include or exclude a company from an index is based solely on specific criteria and in no sense constitutes a judgment by Euronext of the company in any way. Decisions concerning index changes are made public.

All the indices rule books can be found here: www.euronext.com/indices/index-rules

How can I retrieve the index composition of Euronext indices?

You can find the index composition of Euronext Indices at the index’s dedicated web page (www.euronext.com/indices). In the Index Directory you will find an overview of all indices. For an index, go to the “Market Information” tab and scroll down to “Index Composition”. The index composition you see here reflects the composition at the close of the previous trading day (t-1).

How can I retrieve my stock’s market capitalisation within a certain index per a certain day?

If you want to retrieve your stock’s market capitalisation within a certain index per a certain day, please contact the ExpertLine team.