security market

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security market

Postby chandniwadhwani92 » Sun Nov 02, 2014 10:06 am

What is multi market index with fundamental weighting and style index??

In multi market index it is given it prevents a country with previously high stock returns from being over weighted in multi market index
what does this sentence means?

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security market

Postby edupristine » Mon Nov 03, 2014 11:53 am

A multi market index is typically constructed from the indexes of markets in several countries and is used to measure the equity returns of a geographic region (Latin American Indexes), markets based on their stages of economic development (emerging market indexes), or the entire world (MSCI World Index)

Multi Market Index with Fundamental Weighting
It uses market capitalization-weighting for the country indexes but then weights the country index returns in the global index by a fundamental factor (eg GDP) – prevents overweighting a high stock returns.

Style Index
It measures the returns to market capitalization and value or growth strategies, some indexes reflect a combination of the two (small cap value fund), stock can migrate from one to another (small cap move to mid or large cap)

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