Important ETF Benchmarks

Tracking an Index

Most passively managed exchange-traded funds (ETFs) track an index, which means they are constructed to mirror the performance of the index. Each index is composed of stocks that are selected based on certain characteristics, and an ETF tracking the index will usually be made up of the same stocks in the same proportion.

Commonly Benchmarked Indexes

The construction and composition of an index are important factors that affect ETF performance. The number of market indexes continues to expand, and this is only a partial list.

Fundamental vs. Traditional Indexes

The rapid expansion of the exchange-traded fund (ETF) marketplace has spurred innovation along with conflicting philosophies about the best way to assemble and manage stock market indexes.

Commodities

Rising global demand for basic commodities has driven up prices and grabbed the attention of the entire world. ETFs can offer exposure to the commodities market, which has the potential to protect against inflationary risk and to capture capital appreciation.