A market-weighted approach has been the traditional way of constructing international equity portfolios – often because this is the type of benchmark index against which fund managers are measured. But is this the best approach? Building market cap-weighted portfolios is not the mantra of all active, large cap equity managers. This paper examines an alternative construct for an international equities portfolio that encapsulates potentially greater investment returns and a better way of assessing portfolio performance.
Topics addressed:
- Increasing returns
- Building a portfolio
- Sharpe ratio investing