Index Methodology
The Robinhood Investor Index is a proprietary, relative allocation-based index of stocks created by Robinhood and designed to indicate the investments of our customer’s portfolios. It measures how investors are actually positioned.
The Robinhood Investor Index does this by using data on the stock holdings/positions from our 20 million+ funded customer accounts. We do not include holdings in exchange traded funds (ETFs), options, penny stocks or crypto. To focus exclusively on actively acquired positions, we also exclude holdings in free stocks given to the customers by Robinhood. We include accounts that have been open for at least one month, with a minimum equity value of $20, and no maximum value which enables us to broadly reflect our engaged customers according to our analysis.
In our construction of the index, we utilize a proprietary method based on a relative allocation within each account. If customers have more of a particular stock in their accounts, the index holds more of that stock. Thus, each customer’s holdings, as a percentage of their total value in stocks, represents a contribution to the percentage in the index. In this way, everyone has the same influence.
It's important to note that the index does not reflect the positions or performance of any one individual investor, but rather it is an aggregate view of what our customers are investing in on a relative basis. The index weights are re-calculated on a monthly basis, at the beginning of each new month, utilizing values on the last trading day of the previous month. These monthly updates will be published on the dedicated site within 5 trading days after the first trading day of each month. We utilize data beginning in January 2020 (the index’s inception date) to calculate the index.
Statistical Information
The Nasdaq Composite Index is a market capitalization-weighted index of more than 3,700 stocks listed on the Nasdaq stock exchange. The index is constructed on a modified capitalization methodology. This modified method uses individual weights of included items according to their market capitalization. The stocks that make up the Robinhood Investor Index are not the same as the ones in the NASDAQ Composite Index. Individuals cannot invest directly in any index.
The top holdings in the Robinhood Investor Index are represented by circles that correlate to the weight of each investment.
The top sectors list the top eight sectors based on methodology by FactSet Revere Business and Industry Classification System (RBICS) of the Robinhood Investor Index for the prior month. There may be less than eight listed if there are less than eight sectors with holdings during a month.
Market capitalization evaluation is broken into three categories, large cap (greater than $10 billion), mid cap (between 2 and 10 billion) and small cap (between 300 million and 2 billion). The Robinhood Investor Index does not include securities considered micro cap (below 300 million).
Disclosures
Content is intended for educational or informational purposes only. Nothing referenced with regard to the Robinhood Investor Index is a recommendation of a security, account type, trading or investment strategy.
All investments involve risks, including the loss of principal. Past performance is no guarantee of future results.
The Robinhood Investor Index is not a tradable index. It should not be used to predict future performance or trading volumes.
All investing involves risk.
Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker dealer (member SIPC), and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC).
Cryptocurrency services are offered through an account with Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Please review a list of RHC's licenses for more information. Cryptocurrency held through Robinhood Crypto is not FDIC insured or SIPC protected.
The Robinhood spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Please review a list of our licenses for more information.
The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.
Robinhood Gold Card is subject to credit approval and underwriting. Robinhood Gold Card is offered by Robinhood Credit, Inc., and is issued by Coastal Community Bank, pursuant to a license from Visa U.S.A. Inc. Robinhood Credit, Inc. (“RCT”), is a financial technology company, not a bank.
Robinhood Gold is a subscription-based membership program of premium services offered through Robinhood Gold, LLC (“RHG”).
RHF, RHY, RHC, RCT, RHG, and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC, RCT, RHG, and RHS are not banks. Investing products offered by RHF are not FDIC insured and involve risk, including possible loss of principal.
RHY is not a member of FINRA, and products are not subject to SIPC protection, but funds held in the Robinhood spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).
Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.
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