Why the stock market index is important for you

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An investor in Malaysia could use an index from the United States to make informed decisions.

Stock-picking and risk evaluation can be even more daunting for newbie investors, especially for those who are new to gauging market sentiment and stock fundamentals.

In the case of the Malaysian stock market, there are a number of indices that provide investors with comprehensive data. The best part is, an investor in Malaysia could use an index from the United States to make informed decisions, or mutual funds could benchmark their financial instruments to an index from the country.

Among the constituent stocks of the index are Broadcom Inc, Intel Corp, Nvidia Corp, Qualcomm Inc and Micron Technology. A number of these companies have exposure to Malaysia’s electrical and electronic sector, either through physical presence or indirectly via the supply chain. Fund managers can also leverage on the SOX by benchmarking their fund to the index or by creating ETFs linked to the SOX, among other ways.

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