index construction part 2 there are a number of other factors that also need to be determined in the construction of an index. The free float adjustment is often used within market capitalization weighted Equity indexes. This adjustment addresses the fact that not all shares enlisted companies are freely available for trading. The free float adjustment weights the companies not simply by their market capitalization, but rather excludes any shares from the calculation of market capitalization, which are held by long-term strategic shareholders such as directors governments or Associated family trusts. The adjustment is made to ensure that the index better represents the shares that are publicly available for Investments. Another factor, which is relevant in calculating the performance of an index is the measure of return that the index is trying to capture. For an investor. There are typically two sources of return from an investment capital gains or losses and income returns. Indexes, which only capture capital gains and losses are referred to as price return indexes, whereas indexes which capture income returns as well are referred to as Total return indexes both price and Total return variations are typically available for most major indexes. However, the headline figure that's usually quoted is the price return version.