Float-adjusted weighting

Also: free-float weighting, free-float market capitalisation

Float-adjusted weighting sets each company's weight in an index by the market value of the shares available for trading, excluding stakes held by founders, families, governments and other strategic holders. The VGR 40 weights its constituents on float-adjusted market capitalisation in US dollars, so a company with a controlling shareholder carries a smaller weight than its full market value would give it.

// IN PRACTICE

Many large fashion groups have a controlling family or founder, so their weight in a float-adjusted index sits below their share of the sector's total market value. A move in such an index reflects the traded shares, not the whole industry's value.