Synthetic indices are index values that are derived or calculated using the values of other indices or financial instruments, rather than being based on the performance of a physical underlying asset. Synthetic indices can be used to represent or track the performance of an asset, index, or market, and can be created using a variety of methods, such as using derivatives, financial instruments, or other financial products.
Synthetic indices are often used in financial markets as a way to gain exposure to a particular asset or market without actually owning the underlying assets. They can also be used to create investment products, such as index-linked investments, that provide exposure to a particular market or asset.
