What is the appropriate index construction methodology for African equity investment?

Daniel Broby, Morgan Lochead

Research output: Contribution to journalArticle

Abstract

The authors build on research into the African equity universe to recommend a more appropriate index for investment. Three different methodologies were investigated, namely capitalization, equal, and fundamental weighting of index constituents. The authors conclude that diversification is not best served by a market capitalization approach to African index construction and that better risk/reward characteristics can be achieved by the alternative methodologies surveyed.
LanguageEnglish
Pages107-112
Number of pages6
JournalJournal of Financial Transformation
Volume36
Publication statusPublished - Feb 2013

Fingerprint

Equity
Africa
Index construction
Methodology
Weighting
Diversification
Market capitalization
Capitalization
Reward

Keywords

  • African equity
  • African equity index
  • index contruction

Cite this

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What is the appropriate index construction methodology for African equity investment? / Broby, Daniel; Lochead, Morgan.

In: Journal of Financial Transformation, Vol. 36, 02.2013, p. 107-112.

Research output: Contribution to journalArticle

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