Indexverspreid

Indexverspreid is a Dutch term that can refer to the dispersion or spread of the components that constitute an index. In practice, it is most often used in a financial context to describe how evenly the weights of an index’s constituents are distributed within an index-tracking portfolio or ETF. A low indexverspreid suggests concentration of weight among a few members, while a high indexverspreid indicates a more even distribution across many constituents.

Measuring indexverspreid typically involves applying dispersion metrics to the constituent weights. Common choices include the Gini coefficient, the Herfindahl index (HHI), and entropy-based measures. For a set of weights w_i that sum to one, HHI = sum(w_i^2) and diversification can be expressed as 1 − HHI; entropy H = − sum(w_i log w_i) increases as the distribution becomes more even. These metrics help investors assess diversification, potential tracking error, and risk characteristics of a portfolio designed to replicate an index.

Because the term is not tied to a single standardized definition, its precise meaning can vary by author or context. In some Dutch finance texts, indexverspreid is used interchangeably with concepts related to concentration or diversification of index weights, while in other contexts it may refer to different aspects of index construction or performance.

See also: index fund, diversification, weight distribution, tracking error, Gini coefficient, Herfindahl index, entropy.