Arithmetic Index

A group of securities whose overall value is determined by giving equal weight to each security’s performance rather than weighting by other factors like its market weight (think Nasdaq 100) or price weight (the Dow Jones).

It’s nothing more than a straight-up, vanilla average of the performance of all the securities in the index. Like if we have in our index 1,000 shares of GE at $15 and 2,000 shares of MO at $58 and 5,000 shares of AAPL at $200, even though the weighted average in the index of AAPL is way more than the other stocks in there, the arithmetic index ignores the weighting. It just takes the plain jane average of 15, 58, and 200 and reports what the arithmetic mean index did.