Diversifying with alternative asset classes Archives | BetaShares

Raising the benchmark: How and why fundamentally weighted indices have been outperforming

With the rotation out of high priced defensive income stocks in the Australian equity market in recent months – and toward sectors offering relatively better value, such as resources – fundamentally weighted indexing methodologies have again demonstrated their ability to outperform traditional market-cap weighted indices over time.
Dynamic value tilts through a fundamentally weighted index
We have previously discussed the merits of fundamentally-weighted indexing (FWI) methodologies over more traditional market-cap weighted indexing (MCWI) methodologies here, 

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Why did commodities rise and can it continue?

The rise and rise in the price of Australia’s major commodity exports – coal and iron ore – has been one of the astounding features of this year.  This note explores to extent to which this gain in prices was fundamentally justified, and whether these solid price gains can continue. It also re-explores valuations in the Australian resources sector.

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Is it time to buy resources stocks?

The Australian materials sector (largely comprising our major miners) has performed relatively well so far this year due to firmer commodity prices and a relatively benign United States interest rate outlook. Although valuations in the sector appear high, they might be justified if commodity prices hold up near current levels and miners are able to keep a tight reign on costs.

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