Markedsværdivægtning

Markedsværdivægtning is a method used in constructing stock market indices and portfolios. It involves weighting each constituent security based on its total market value, which is calculated by multiplying the number of outstanding shares by the current share price. This means that companies with larger market capitalizations have a proportionally larger influence on the index's performance than companies with smaller market capitalizations.

In the context of stock indices, such as the S&P 500 or the OMX C25, market capitalization weighting is the most common approach. When a stock's price increases, its weight in the index also increases, and vice versa. This reflects the overall change in the market value of the companies included in the index.

For portfolio management, market capitalization weighting can be used to create passively managed funds that aim to replicate the performance of a specific market index. Investors who use this strategy believe that it is difficult to consistently outperform the market and that a diversified portfolio weighted by market value offers a sound investment approach.

An advantage of market capitalization weighting is its simplicity and direct reflection of the market's overall value. However, it also means that larger companies can dominate the index, potentially masking the performance of smaller, faster-growing companies. Alternative weighting schemes, such as equal weighting or fundamental weighting, exist to address these potential drawbacks.