You've probably come across the term 'stock market index'. Ever wondered what it is? An index is the collective performance of various asset classes, such as shares and stocks, commodities, bonds, and other forms of securities.

Decoding the Stock Market Index

All stock market indexes provide a fair glimpse into the economic performance of the country whose market they track. A high-performing index indicates a growing economy and fledgling market, while a trailing index usually signals an economic slowdown. Investors and analysts regularly track the performance of the major global stock market indices to identify lucrative investment opportunities.

List of major global stock market indices

Here are some of the major stock indices in the world:

* Source: Bloomberg (28th Feb 2023)

Why Invest in ETFs or Mutual Funds That Track Global Indices?

• Diversified portfolio: By investing in global indices, investors can reduce their portfolio's risk by diversifying across different regions and industries. Global indices also allow investors to gain exposure to countries and regions they may not have access to through their local stock market.
• Lower costs: ETFs and index funds are not actively managed. Hence, they generally have lower fees and expense ratios, adding to your overall returns. 
• Convenience: Buying an ETF or investing in mutual funds through a SIP is extremely easy. You can invest small amounts regularly to build a large corpus through compounding. 
• Investment appreciation: Get investment appreciation due to rupee depreciation against USD, EUR, and other foreign currencies.

Naturally, any form of direct or indirect investment comes with its own set of risks that need to be carefully evaluated before proceeding. Carefully research the instrument to invest in and choose the platform that charges the least while giving you the most flexibility and variety of options.

Consider the Fi app; it enables you to invest in top US index ETFs — at industry-best forex rates. What's more, on Fi, you can buy US Stocks instantly with zero brokerage fees. If mutual funds are more to your liking, mutual fund investments on Fi are commission-free. With its intuitive user interface, suited for novice & seasoned investors, you can select from over 800 direct index funds. You can invest daily, weekly, or monthly via automatic payments or SIPs created with one screen tap. Moreover, Fi offers 100% flexibility with zero penalties for missed payments.

Frequently Asked Questions

What are global indices?

The major stock indices in the world can be called a measurement benchmark that tracks the performance of equity markets in their specific geography. These indices provide investors with an overall view of the global stock market and help them compare the performance of different regions and countries. These indices can be at a global (collective) level, like the MSCI World Index or the FTSE All-World Index, at a regional level, like the MSCI Asia Pacific Index or the STOXX Europe 600 Index, and more often at a country level, such as Sensex (India), the S&P 500 Index (USA), the FTSE 100 Index (UK) and so on.

How many global indices are there?

It is hard to put an exact figure on the total number of the world’s major stock market indices. This is because there are various indices worldwide (global, regional, pan-continental, country-level, sector-level, etc.). The actual number varies depending on the tracked index and the financial data provided.

Can I invest in global indices?

Yes, you can invest in global indices directly through an ETF or indirectly via an index mutual fund. Additionally, you can use an Indian platform that is authorised to deal in these products or through an international broker with a presence in India.