Watch the Cap Gap: Considerations for Your US Equity Portfolio 

Investment considerations for your US equity portfolio

Investment benchmarks serve as the universal lens for which we measure performance.  

Most have heard of the S&P, Russell and MSCI, but few truly understand the construction and composition of the various US public equity indices. While some benchmarks, particulary in the US large cap space, are often used interchangeably, their differences in market cap coverage should not be ignored. This paper seeks to provide a closer look at market cap coverage for some of the most popular US indices, while quantifying the level of tracking error that could exist if coverage gaps exist. Although we are not suggesting a full reunderwriting of one’s portfolio, we recommend investors at the very least examine their public equity allocation to determine the appropriateness of its respective benchmark.

Watch the Cap Gap:

Considerations for Your US Equity Portfolio 
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