'Share prices can - and do get caught up in sentiment and ignore fundamentals'
FUNDAMENTAL INDEXING is becoming increasingly popular with South African investors, with the RAF1 exchangetraded funds gaining traction. But there may also be some clues for stockpickers from those products. Whereas a traditional marketweighted index, such as the Satrix40, includes shares according to their size, the JSE/FTSE RAFI (short for research affiliates fundamental index) weights stocks according to a fixed set of investment criteria, such as cash flow, dividends, liquidity, book value and sales.
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