Large index weightings can aid outperformance

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The high stock concentration in national indices is being countered by the regional investment appro...

The high stock concentration in national indices is being countered by the regional investment approach taken by most fund managers in the Asia region. Korea Telecom constituted over 30% of its domestic market as at 5 July with SK Telecom accounting for 16.5% and Samsung taking up more than 20% of the market. Phillipa Gould, a director at Schroder Investment Management, says the high concentration of stocks on the indices can give fund managers the opportunity to outperform the market substantially by holding stocks outside the benchmark. MSCI aims for its individual country indices to c...

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