We believe there are two ways the market can be evaluated from an investment standpoint:
Market Cap Based
- Stock price multiplied by outstanding shares
- Assumes markets are efficient and prices reflect all information at all times.
- Indexes invests in companies proportional to market valuation
- Seeks equity risk premium, not alpha, return
- Based on a company's fundamental factor
- Markets are constantly seeking fair value and prices may not reflect all information.
- Some companies may be overpriced and some are underpriced
- Certain economic metrics are value-driven and can create strategies that may outperform market cap returns.
Following the Economic Based viewpoint, the Global Sales Weighted Indexes (GSWI) strategy is to invest in the largest and most successful companies by sales from around the world. We rebalance a client's portfolio annually, reallocating more dollars to companies that have the highest sales.
The Global Sales Weighted Indexes™ Methodology:
- The Global Sales Weighted Indexes (GSWI™) are made up of the world's 500 largest large cap, mid cap, and small cap global sales leaders.
- Each company representing the 500 largest large cap, mid cap, and small cap global sales leaders is ranked by the last twelve months of reported sales data. The sales number for each individual company is divided by the total sales number for all of the companies combined which provides the weighted value for each security.
- Each Index is rebalanced annually each December to match current sales data. Sales data comes directly from the 10Q form each company files with the SEC*. The sales numbers are compiled and ranked using FactSet.
* Sales numbers may also come from 10K, 10Q, or 20F