What is an Index?

An index is a theoretical, or paper,  portfolio of stocks, bonds, commodities or other assets that represents either: what the average investor holds in his or her portfolio, or the investable universe of a given asset class or sector of the market.

Indexes serve as benchmark measurements of the overall performance of a market. For example, investors who want to know if the U.S. “market” is up or down today will look at the performance of the Standard and Poor’s 500 index which is a theoretical portfolio made up of the 500 largest U.S. stocks. Similarly an investor who wants to know if the Israeli “market” is up or down, or how Fintech stocks are doing on any given day, will look at the performance of one of BlueStar’s Indexes such as the BlueStar Israel Global Index or BlueStar Fintech Index.

What is an Index Investment Fund?

An investor can “invest” in an index by buying shares of an index investment fund. Index investment funds, such as Exchange Traded Funds (ETFs) or Index Mutual Funds, are managed by the fund issuers so that the return of the index investment fund approximately mimics the return of the index.

There are currently three ETFs tracking the performance of BlueStar’s indexes available in the US. In addition, there are 12 ETFs or Index Mutual Funds tracking BlueStar’s indexes available in Israel. For information about which funds are tracking BlueStar’s indexes in  your market, please reach out to us through the “How to Invest” page of our website.