Selection сriteria
Selection criteria in funds and indices set the methods for selecting securities for a portfolio. They help systematize the selection of assets and ensure strategic investment. The variety of criteria listed below reflects different approaches to forming investment portfolios and indices:
- AMT-free: prioritizes municipal bonds exempt from the U.S. Alternative Minimum Tax.
- Beta: considers securities' systematic risk relative to a benchmark.
- Committee: relies on decisions by an individual or group.
- Credit downgrade: targets corporate bonds downgraded from investment grade to high yield.
- Credit rating: focuses on corporate bonds rated by commercial agencies.
- Depositary receipts: includes only depositary receipts.
- Developed-market currencies: chooses bonds denominated in currencies of developed countries.
- Distributions: prefers limited partnerships with a specific distribution yield.
- Dividends: factors in dividends paid by companies.
- Earnings: considers a firm's earnings levels.
- Exchange-listed: involves securities listed on a specified exchange (Hong Kong-listed, NASDAQ-listed).
- Financials: highlights bonds from the financial sector.
- Fixed: refers to securities that remain unchanged in a portfolio.
- Fundamental: uses data from a company's financial statements.
- Interest rates: emphasizes currencies from countries with specific interest rate levels.
- Liquidity: weighs securities based on their liquidity.
- Market cap: incorporates market capitalization, accounting for liquidity and possible capping.
- Market value: relies on the market value of debt securities.
- Maturity: focuses on securities' maturity dates.
- Momentum: bases selections on historical price trends.
- Multi-factor: merges fundamental and technical factors.
- Principles-based: applies principles like environmental, social, or governance standards.
- Proprietary: uses unique rules or processes, possibly through active management.
- Revenue: factors in revenue from specific industries or regions.
- Revenue-backed: picks municipal bonds supported by specific project revenues.
- Share buybacks: favors firms repurchasing their shares.
- Single asset: involves just one security or commodity.
- Technical: considers securities' historical price movements.
- Time since listing: considers the IPO or spin-off date, including SPAC formations.
- U.S. dollar-denominated: prefers bonds in U.S. dollars, irrespective of the issuing country.
- Volatility: considers the price variance of securities.