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Index performance comparison
About the Indices
Benchmark index in the U.S. for the largest technology stocks
- Launched in 1985
- 100 of the largest non-financial companies listed on the Nasdaq
- Include non-U.S. companies
- It is a market capitalization-weighted index which is similar to the mainstream indices
- Often confused with the well-known NASDAQ index, which is a composite index that includes almost all companies listed on the Nasdaq Stock Exchange, with a total of over 3,000 companies
|Company||% of index weight|
|Apple Inc. (AAPL)||13.70%|
|Microsoft Corporation (MSFT)||10.48%|
|Amazon.com Inc. (AMZN)||6.99%|
|Tesla Inc. (TSLA)||3.83%|
|Alphabet Inc. (GOOG)||3.69%|
|Alphabet Inc. (GOOGL)||3.57%|
|Meta Platforms Inc. (META)||2.60%|
|NVIDIA Corporation (NVDA)||2.54%|
|PepsiCo, Inc. (PEP)||2.33%|
|Costco Wholesales Corp (COST)||2.03%|
Benchmark index in the U.S. for blue-chip stocks
- Launched in 1896
- It is a price-weighted index and tracks 30 most prominent companies traded on the New York Stock Exchange (NYSE) and Nasdaq. Its components are selected by an index committee
- The compositions were chosen from S&P 500 Index. It covers all industries except transportation and utilities
- Includes only US companies
- The use of the word “Industrial” in the name was for historical reason, component companies now have little correlation with the industrial sector
|Company||% of index weight|
|UnitedHealth Group Incorporated (UNH)||11.30%|
|The Goldman Sachs Group Inc (GS)||6.75%|
|The Home Depot Inc. (HD)||5.85%|
|Microsoft Corporation (MSFT)||5.50%|
|McDonald's Corporation (MCD)||5.42%|
|Amgen Inc. (AMGN)||5.13%|
|Visa Inc. (V)||4.06%|
|Caterpillar Inc. (CAT)||3.92%|
|Honeywell International Inc. (HON)||3.86%|
|The Travelers Cos Inc (TRV)||3.71%|
U.S. Index DLCs FAQs
The price of underlying DLCs will move during Singapore trading hours since the issuers use underlying futures as hedging tools. In the case of the Nasdaq, issuers use NASDAQ 100 E-mini Futures, whereas the Dow Jones E-mini Futures is used as hedging tool for the Dow Jones index DLCs. These futures have a very short maintenance period and are traded on the Chicago Mercantile Exchange's electronic trading platform for nearly 24 hours, which means that when events occur in the APAC region or Europe while the U.S. stock market is closed, it will still reflect on the U.S. stock futures immediately. Singapore investors can adjust their strategy before the U.S. stock market opens.
In assessing the performance of the DLCs you should be aware that daily leverage performance of the DLC is always referenced to the previous closing level of the US indices, which is usually 4pm Eastern Time for regular trading days.
U.S. stock indices are denominated in USD and are subject to forex risk as the underlying futures are also denominated in USD. The performance will be influenced by the exchange rate of USD to SGD.
Similar to DLCs with HK underlying assets, U.S. index DLCs are subject to compound effect, expiry date, daily cost, market forces, and issuer risk; however, there are more factors that investors should consider when investing in U.S. index DLCs:
Exchange Rate: Fluctuations in exchange rates may affect the price performance.
Price Limits: The Chicago Mercantile Exchange (CME) imposes an overnight price limit of 7% on US index futures. The market remains open for trading when the futures price rises/ falls to trigger this limit while buying (when it rises to the limit) and selling (when it falls to the limit) activities are restricted. A circuit breaker mechanism governs the day trading. Please visit the CME Group website for more information.
As a result, when trading U.S. index DLCs during Singapore trading hours, investors should be aware of the overnight price limits, which may make it difficult for issuers to hedge, which may result in wider bid-ask spreads and reduced liquidity.
Need-to-know for U.S. Index DLCs
Investors should note that Air Bag mechanism can only be triggered by the US equity index, but not the futures. In other words, for DLCs over US equity index, given there is no overlap between US trading hours and SGX trading hours, this means the Air Bag Mechanism CANNOT be triggered during SGX trading hours. Even if the price of the futures were to move significantly (e.g. more than 10%) during SGX trading hours, the airbag mechanism will never be triggered during SGX trading hours.
If airbag happens during US trading hours when the US equity index goes down (for Long) or up (for Short) by more than 10% (airbag trigger level), but less than 20% (for 5x, or 14.3% for 7x) within the Observation Period, then the DLC theoretical value and exposure will be reset when the airbag is triggered, and then reset again when the US exchanges close. In this case, DLC theoretical closing value will be different from if there was no airbag mechanism in place (which is the same effect as an airbag on DLCs with a Singapore or Hong Kong underlying asset, except that investors cannot trade the DLC when this is about to happen). On the next SGX trading day, DLC performance will be based on the reference value determined at US exchange close.
If airbag happens overnight when the US equity index goes down (for Long) or up (for Short) by more than 20% (for 5x, or 14.3% for 7x) within the observation period, the DLC will be permanently suspended on the next SGX trading day and will be delisted subsequently. Investors will lose the entire value of their investment.