View Single Post
Old 09-05-2019, 07:40 PM   #1207
BBCWatcher
Supremacy Member
 
Join Date: Jun 2010
Posts: 9,688
Going by GDP, the allocation IWDA: EIMI should be around 2:1. If you are concerned that GDP might be biased by huge international companies operating in EM countries, then the GNI ratio based on IWDA: EIMI constituent countries is roughly 3:2 if memory serves me right!!
These weights wouldn't make much sense.

Consider Alphabet (Google), for example. The company happens to be headquartered in California, and its stock happens to be listed and traded on a stock exchange in New York. But it provides its services and earns revenues across the planet. A whopping 54% of its revenues are from outside the United States. Why on earth would you apply a national weight of any sort to this company? It doesn't make any sense. Its real business is thoroughly international.

If you're going to tinker with stock weights, do it based on some reasonable attributes associated with the real businesses of these companies.
BBCWatcher is offline   Reply With Quote