Last updated: 2025-12-02
SmartInvestments - Comparative and Blended Indices
SmartInvestments - Comparative and Blended Indices
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- Overview
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Overview
Indices are used as benchmarks to determine how clients' investments
are performing compared to the market (see [Performance
Calculations](/help/pro/smartinvestments/-/performance/calculations)).
There are two types of indices in SmartInvestments:
-
Comparative: A comparative
index measures the ups and downs of the stock, bond and commodities
markets, reflecting the market prices and the number of shares outstanding
for the companies in the index. Popular indices include the S&P
500, Dow Jones, Consumer Price Index, Value Line and NYSE Composite.
-
Blended: A blended index
combines two or more standard comparative indices. Blended indices
are useful in evaluating the performance of accounts comprising different
investment types. For such accounts, an individual index may not be
a good indicator of how the account has performed. A blended index
can more closely mirror the mix of investments in the account. There
is no limit to the number of indices that can be combined in a blended
index.
Indices are stored and tracked as [investment
securities](/help/pro/smartinvestments/-/working/with/investment/securities) in SmartOffice.
Index Setup
Creating a Comparative Index
-
[Create
a security](/help/pro/smartinvestments/-/creating/and/deleting/investment/securities), making sure to select the Comparative Index security
type.
-
When the Detail content link displays, complete the
Symbol/CUSIP, Name, Date and Index Value fields.
-
Select Menu
> Save.
Creating a Blended Index
Note: Before creating a blended
index, ensure that at least two comparative indices exist in the system.
-
[Create
a security](/help/pro/smartinvestments/-/creating/and/deleting/investment/securities), making sure to select the Blended Index security type.
-
When the Detail content link displays, complete the
Symbol/CUSIP and Name fields. The symbol can be anything, such as
BLEND1.
-
Specify the comparative indices that will make up
the blended index:
In the Index List section, click the Options
and select New
'Participating Index' record.
-
When the Indices Available dialog box opens, tag
two or more comparative indices.
-
Click the OK
button.
-
In the Index List, specify a percentage for each index.
The total must equal 100%.
-
Select Menu
> Save.
Index Values and Returns
The primary differences between indices and other security types in
SmartInvestments are:
-
Indices have a Value/Return [content
link](/help/pro/tabs/and/content/links) instead of a [Price
History content link](/help/pro/smartinvestments/-/price/history/content/link).
-
The Investment Security Positions tab, which normally displays
for other security types, is not available for indices.
The Value/Returns content link of an index displays a historical list
of index values and returns for the index.
To view the details of an index value, click its first-column hyperlink
(the price date, by default).
Values can be added to the list manually by clicking the Options
and selecting New 'Price
History' record. They can also be downloaded from the Internet
(see [Updating
Security Prices](/help/pro/smartinvestments/-/updating/security/prices)).
When the list of index values has been updated, click the Options
and select Refresh Index
Return to recalculate the returns.
Index Calculations
This section describes the formulas SmartOffice uses to calculate values
and returns on an index's Value/Returns content link.
Index Return
Given the index value, SmartInvestments calculates the index return
as follows:
Index Return Formula = [((Current Index Value ÷ Previous Index Value)
− 1) × 100]
For example:
Date
Index
Value
Index
% Return
7/12/2002
8,684.53
7/15/2002
8,639.19
−0.52
The calculation is:
Index Return
= [((8,639.19 ÷ 8,684.53) − 1) × 100]
= [(0.994779222 − 1) × 100]
= [−0.005220778 × 100]
= -0.5221
Blended Index Value
To calculate a blended index value, SmartInvestments totals a percentage
of each comparative index's value based on each index's weight in the
blended index.
For example, suppose a blended index is
composed of three comparative indices as follows:
| Index
| Index Value
| % of Blended Index
| Index1
1284.25
| 60
| Index2
3592.54
| 30
| Index3
1224.56
| 10
The calculation is:
Blended
Index Value
=
% of Index1 + % of Index2 + % of Index3
=
.60 (1284.25) + .30 (3592.54) + .10 (1224.56)
=
770.55 + 1077.76 + 122.46
=
1970.77
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