Definition
Capped Series
A version of the index in which no single constituent may exceed a fixed maximum weight, with the excess redistributed across the remaining constituents.
- Status
- Definition in force
- Method version
- 1.0
- Reviewed
- 2026-08-22
In the Live Index framework
The live-music equity universe is small and concentrated. Left uncapped, a single promoter and ticketing group would dominate any capitalisation-weighted construction to the point where the index reports that company's share price rather than the sector's condition.
The capped series applies a maximum weight at each rebalance date and redistributes the excess pro rata across constituents that remain below the cap, iterating until no constituent breaches it. The cap is a construction rule, not a view: it is set once, published, and applied identically at every rebalance regardless of which company happens to be at the top.
Both a capped and an uncapped series are maintained because they answer different questions. The uncapped series describes the investable market as it actually is, concentration included. The capped series describes the breadth of the sector underneath that concentration. Publishing only one would hide something a reader needs.