Identify the assets or securities to be included. This could be stocks, bonds, commodities, or even alternative assets.
Set eligibility criteria. Define factors like market capitalization, sector, geographic location, or liquidity for inclusion.

How will individual components contribute to the overall index value? Popular choices include market capitalization weighting, equal weighting, and factor-based weighting.
Consider the impact of weighting on the index’s performance and risk profile.

Develop a clear methodology document outlining the index construction and calculation rules.
Implement a system for regular rebalancing and data updates to ensure the index remains relevant and representative.

Develop a robust platform that efficiently and accurately calculates your index value at regular intervals. Clearly document your calculation methodology. Sharing your index’s story, provide detailed documents explaining your index construction, weighting rationale, and performance history,…