Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

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.