Stock Market Ticker
April 1, 2019

Enough Is Enough: Why We Cap Country Exposure in Our Emerging Markets Strategy

Recently, Parametric’s Emerging Markets Investment Committee studied how we should respond to the growing weight of China in the MSCI Emerging Markets Index.  Our study re-affirmed the current maximum weight assigned to any one country in our Emerging Markets strategies; that is, twice a Tier 1 weight.   With our current country tiers, this decision results in a maximum target weight cap of approximately 12% for such a “super-tier” assignment. 

While China’s increased weight in the index was the impetus for this discussion, our resulting decision was crafted with a broader lens: how we would respond when any country reaches a weight that represents a disproportionate percentage of the index. 

Read our paper to find out what key factors we considered.

Download this Paper
Tim Atwill Picture
Tim Atwill, PhD, CFA
Head of Investment Strategy (emeritus)
Tim Atwill Picture
Tim Atwill, PhD, CFA