Portfolio construction rules

Paul, in relation to your portfolio construction rules, you select companies from the ASX 100 but measure performance against the 200 index. Why not measure against the 100 index?

A: Great question – not sure I have a great answer. A couple of reasons:



  1. I don’t specifically exclude stocks outside the top 100 – although I don’t have any at the moment and probably wouldn’t include; and

  2. S&P/ASX 200 is the benchmark index. While there is an index for the top 100, there are no individual sector indices (for example S&P/ASX 200 Materials) for the top 100 stocks, and most of the fund managers/ETFs track against the 200 index.



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