Bovespa Index
What It Is:
The Bovespa Index tracks around 50 stocks traded on the São Paulo Stock, Mercantile & Futures Exchange. The term Bovespa is derived from BOlsa de Valores do Estado de São Paulo, the Portugese name for the exchange.
How It Works/Example:
The Bovespa Index tracks stocks that account for 80% of the total market volume traded in the last 12 months and that were traded on at least 80% of trading days.
This is an accumulation index, meaning it represents the present value of a portfolio begun on January 2, 1968 with a value of 100. It has been divided by a factor of 10 on 11 occasions since inception.
Why It Matters:
The Bovespa is an important index, as it tracks one of the world's most significant emerging markets, Brazil. Since it is a market cap weighted index, the largest firms tend to have the greatest impact on the Bovespa's value.
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Cached on May 24, 2012, 1:15 pm