SS11 LOS J discusses the process to compare and contrast the methodologies to construct
equity style indicies. Is this to assess the style the manager is pursuing?
I am okay up to the point that says the index could be constructed as either value or growth but what is the significance of a third neutral category? Also why does an overlap come in? Is this because the stock category cannot clearly be established as growth or value? Why would a manager be interested in an index with an overlap?
Some help please.作者: strikethree 时间: 2011-7-13 16:35
Are you using an old text book? LOS statement from my textbook states that:
LOS32j. compare and contrast the methodologies used to construct equity style indices;
There is no 'process' nor 'discuss' in the LOS! Makes a world of difference!
Also the LOS states nothing about why a manager wants an overlap index or category. So don't bother about the manager part!
Just memorise that some index provider would categorise a stock either a growth or value while others would permit an overlap.作者: ohai 时间: 2011-7-13 16:35
Russell Indices are an example where overlap occurs.
Since 1995 , they began allowing stocks to be members of both Large Growth AND Large Value , or Small growth AND Small value
