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

Daniel Broby and Morgan Lochhead
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Daniel Broby: University of Strathclyde, http://www.strath.ac.uk/
Morgan Lochhead: King's College London, http://www.kcl.ac.uk/index.aspx

Journal of Financial Transformation, 2013, vol. 36, 105-110

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.

Keywords: African equity; equity investment; African index (search for similar items in EconPapers)
JEL-codes: G11 G24 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:1548

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