Index Investing: From Theory to Practice · Dr MAI Huu Minh, TRAN Phan Bao Ngoc & HUYNH Nguyen Quoc BuuChapter 11 of 37 · Module 3: Index design
CHAPTER 11
Sector, Thematic, ESG and Multi-Asset Indexes
Slicing the market, scoring themes and mixing asset classes
Opening question
“I believe in artificial intelligence, I care about the climate and I want some gold in my portfolio. Is there an index for each of those — and can I trust what is inside?”
In this chapter
- How sector classification systems such as GICS and ICB slice the market
- Sector and country indexes, and why they need caps
- Thematic indexes built from exposure scores — with a worked 6% cap
- The pitfalls of thematic investing: hype, valuations and concentration
- ESG indexes: exclusions, best-in-class, tilts and climate benchmarks
- Commodity, gold and bond indexes, and the roll yield of futures
- Multi-asset and strategy indexes, and the arithmetic of monthly rebalancing
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This chapter is in the full book
Chapter 1 is free to read online. The full text of chapter 11 — with its tables, figures, worked examples and practice lab — is available in the complete edition of Index Investing: From Theory to Practice (Volume 1, NXW Investment Library).
Read Chapter 1 freeGet the full book — [email protected]Sections of this chapter
11.1 Why slice the market?
11.2 Sector classification systems
11.3 Sector and country indexes
11.4 Thematic indexes and exposure scores
11.5 The pitfalls of thematic indexes
11.6 ESG and climate indexes
11.7 Commodity and gold indexes
11.8 Bond indexes
11.9 Multi-asset and strategy indexes