What is meant by "Top Down" International Investing!
This means country allocation is the most important and perhaps only priority. Little consideration is given to relative, local stock valuations. Once the country allocation percent has been selected, a sort of junior analyst evaluates within a short time the largest capitalized companies in that country and then, strictly according to size: the Fund simply invests proportionally: "top down". The bigger the stock by market cap., the more is bought.
These global funds, are obsessed in only considering for investments very largely capitalized companies and in so doing, are paying tremendous premiums for ill-understood, fictitious liquidity.
Does everyone have these artificial restrictions? Liquidity should have a premium but is this "premium" endlessly priced? Investors whom got beyond such dogma have enjoyed far larger returns, as we have shown here again and again.
Paul A. Renaud.