VN UK Health Care Index — Methodology

What it measures

The VN UK Health Care Index is an indicative measure of UK-listed healthcare equity performance. It is not a benchmark, not an investable product, and not investment advice. It exists to give readers a single readable number for the direction of UK healthcare equities alongside VanadiumNews reporting.

Constituents

Weighting

Equal weight — 20% per constituent, rebalanced quarterly on the first LSE trading day of January, April, July and October.

Base

Set to 1,000 at the close on the first computation date.

Calculation

For each constituent we compute the ratio of today's adjusted closing price to its base price. The index is 1,000 multiplied by the average of these ratios. The daily change is the arithmetic mean of the constituents' daily percent changes — with equal weights this is mathematically the correct daily move.

Worked example. If the five constituents move +1.2%, −0.4%, +0.3%, +0.8%, −0.1%, the index moves +0.36% for the day.

Data source

Twelve Data, London Stock Exchange adjusted closing prices.

Corporate actions

Adjusted prices are used, so stock splits, rights issues and special dividends do not create artificial movements in the index.

Constituent review

Constituents are reviewed annually. A constituent removed on acquisition or delisting is replaced at the next quarterly rebalance by the largest eligible UK-listed healthcare company by market capitalisation.

Limitations

With only five constituents the index is a small sample. It is more volatile than a broad benchmark, and a single company's move can dominate a day's reading. Read it as a directional signal, not a portfolio benchmark.