Portfolio Construction

Market-Capitalisation Weighting

Definition

What is Market-Capitalisation Weighting?

Weighting securities according to their market values.

Example in practice

The largest listed company receives the highest weight in a market-cap index.

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The complete collection of investments owned by an investor or managed under one mandate.

The process of selecting and combining investments to meet return, risk, liquidity, and time-horizon objectives.

A long-term target mix of asset classes based on an investor's objectives and constraints.

A statistic ranging from minus one to plus one that describes how two return series move together.

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