What are theme indices?
Theme indices are financial indexes that are based on investment themes, instead of geography or industries.
Indices are built on the basis of unique selection and weighting methods to provide a diverse and tradeable index.
Where have you heard about theme indices?
You may be more familiar with individual theme indices than the broader term. Some of the bigger theme indices include the S&P Global Consumer Enterprises Index and the NYSE Current Two Year, Five Year and Ten Year U.S. Treasury Indices.
What you need to know about theme indices.
Theme indices are constantly evolving as new investment opportunities spring up. Rather than focusing on traditional industries and geographic areas, theme indices identify social, economic, demographic, environmental and industrial trends. The indices measure the performance of these trends to examine their long-term effect on global markets and economies.
Equity-based commodities, fixed income and alternative energy are common theme indices but they vary according to provider.
Find out more about theme indices.
Learn more about how traditional indices work with our definition.