What are synthetic indices?

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.

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