Dj Index Etf
How, [in plain English 
], are the MSCI EAFE and MSCI World indexes calculated?
I have percentages of my portfolio in EAFE and World index funds.
How do these funds indexes work? How are they calculated? Are ETF’s based on these indexes more accurate than index funds? Is there a cycle of sorts between the S&P 500 or the DJ Composite index and the EAFE or World index; ie has history shown the EAFE to lag S&P bull market for example?
Or is there any historical correlation at all between the EAFE or World indexes versus broadly based American indexes.
Thanks!!!!
The indices are comprised of a basket of stocks. Their prices are added, and if they are weighted by market cap, a factor is added. Then they are divided by the number of stocks in the index and that number is published. If a stock moves into or out of the basket of stocks the market cap or adjustment factor is changed so there is not a big spike one way or another.
ETFs generally have a lower expense ratio than a similar mutual fund offering by the same family. Mixing one ETF family with a different mutual fund offering my produce an ETF with a higher expense ratio.
The market indices, while moving in sympathy with others, will show divergence based on market sentiment and the strength of the economies underlying the stocks.
Nasdaq, SP500, Dow Jones Stock Market Review 7/17/07
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