##  [# Price-Weighted Index Definition](/etf-education-center/etf-glossary/price-weighted-index) 

 

# Price-Weighted Index Definition

 

 

Learn the definition of price-weighted index and other ETF terminology from the etf.com glossary.



 

 

 

 

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[By ETF Glossary](/authors/etf-glossary)

 Jan 16, 2024

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## Learn more about Price-Weighted Index

A Price-Weighted Index in ETFs operates by assigning weights to its components based on their individual stock prices. Unlike market-capitalization-weighted indices, where larger companies have more influence, price-weighted indices give higher importance to stocks with higher prices. ETFs tracking price-weighted indices offer investors an alternative perspective on market representation, potentially leading to different investment outcomes. This unique methodology provides a distinctive lens through which investors can gauge market movements, encouraging a diversified approach to index tracking within the multifaceted landscape of exchange-traded funds.

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  ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock…   [View Bio](/authors/etf-glossary)

 



 

 


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