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.
Original languageEnglish
Pages (from-to)107-112
Number of pages6
JournalJournal of Financial Transformation
Volume36
Publication statusPublished - Feb 2013

Keywords

  • African equity
  • African equity index
  • index contruction

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