Understanding Sustainable Wealth Creation Principles Improves the Construction of International Equity Portfolios

August 2014

As part of our global investment research process, Sustainable Wealth Creation principles are divided into twelve Economic Standards. These standards were established by determining how the desirable conditions embodied in the principles can be evaluated in topically-related areas. Each Economic Standard covers multiple topics and we split the Economic Standards into almost 300 Qualitative Sovereign Factors.

The process of researching Qualitative Sovereign Factors involves determining each country’s level of intent to abide by each factor and the actual level of adherence by all of the relevant institutions within the country. The process is designed to apply international standards of intention and behavior so that all countries are measured on a uniform scale.

In order to convert each Qualitative Sovereign Factor into investible quantitative scores, Magni employs a uniform objective scale that is applied to all Qualitative Sovereign Factors.

This common, clear, and simple scale helps make the global investment research reasonably objective and is designed to minimize distortions attributable to analytical biases.

Looking for more perspective on international investing? Download our whitepaper: “Country Selection – A Powerful Technique of International Equity Investing.” Follow Magni Global Asset Management on LinkedIn and Twitter @MagniGlobal.

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