NYSE Composite Index

What Is the NYSE Composite Index?

The NYSE Composite Index measures the performance of all common stocks listed on the New York Stock Exchange, including American Depositary Receipts issued by foreign companies, Real Estate Investment Trusts, and tracking stocks. The loads of the index constituents are calculated on the basis of their free-float market capitalization. The index itself is calculated on the basis of price return and total return, which incorporates dividends.

The breadth of the NYSE Composite Index (NYA) causes it an obviously better indicator of market performance than narrow indexes that to have far less components.

Grasping the NYSE Composite Index

The NYSE Composite Index incorporates all NYSE-listed stocks, including foreign stocks, American Depositary Receipts, real estate investment trusts, and tracking stocks. The index rejects closed-end funds, ETFs, limited partnerships, and derivatives.

The two greatest benefits to investors of the NYSE Composite Index are (a) its quality, as all constituents must meet the severe listing requirements of the exchange, and (b) its global diversification, with international companies accounting for around one-third of market capitalization.

The NYSE Composite Index is viewed as a better substitute for the broader stock market than a considerable lot of its narrower partners, due to the number of constituents it has and the global diversity of its holdings.

How the NYSE Composite Index Works

The New York Stock Exchange sent off the composite index in 1966. It was relaunched in 2003 utilizing another methodology that is more in accordance with index methodology applied by well known broad-based US Indexes.

ICE Data Services is the index sponsor and administrator. Securities Industry Automation Corp kept up with and calculated the index until 2003, when it was relaunched with the assistance of Dow Jones Indexes.

Under the current methodology, the composite index no longer considers an assortment of security classes eligible for inclusion: closed-end funds, ETFs, preferred stocks, derivatives, shares of beneficial interest, trust units, and limited partnerships.

The last trading price of the included securities is applied to compute the composite index. Maintenance incorporates standard monitoring and adjustments made for companies that are added or erased from the index. Certain activities by companies, like stock splits and stock dividends, may call for simple changes to be made in the composite index to account for common shares outstanding as well as stock prices for the included companies. An index divisor adjustment may be required for different types of activity, including the issuance of shares, which lead to changes in the aggregate free-float adjusted market capitalization of the composite index.

Features

• The NYSE records in excess of 2,400 companies, of which international companies comprise around one-third of total market capitalization.
• The NYSE Composite Index is an identifiable index that mirrors the performance of the multitude of stocks listed on the New York Stock Exchange.
• The NYSE Composite Index has a view of quality due to severe listing requirements and global diversity due to the breadth of its holdings.