Financial Services Industry
Industry: Email Alert RSS FeedIndex diversity plummets.
Investment Adviser, July, 2006
Global equity funds run on a top-down basis are at risk from a continued erosion of sector diversification, research from Fidelity has warned.
A study of corporate rankings carried out by the fund manager showed over the past 20 years, the sectors represented by the top 20 companies in the MSCI World index have become more concentrated, while some countries such as Japan are hardly represented.
This begs the need for greater stock-picking, the report claimed. In June 1986, the 16 sectors represented ranged from electricity to automobiles, and soft drinks to fixed line telecoms.
However, by June this year, there were only 10 sectors represented among the top 20 companies, with banks pharmaceuticals, and oil and gas companies dominating the...
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