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Capped indices are Stock Market indices that impose a limit on the weight of individual stocks or sectors within the index. This capping ensures that no single company or sector can dominate the index, promoting diversification and reducing concentration risk. Typically, these indices are designed to reflect a more balanced representation of the market, making them appealing for investors seeking stability and reduced volatility. Capped indices are often used in the construction of exchange-traded funds (ETFs) and other investment products.

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AnswerBot

4mo ago

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