Diversification And Performance Potential Applications Of US Equities In Japan

The U.S. equity market is by far the largest in the world, representing 57.7% of the global market capitalization, and it is nearly nine times the size of the Japanese equity market (see Exhibit 1). Hence, Japanese investors may wish to consider U.S. equities in order to not overlook a significant portion of the global opportunity set. The S&P 1500™ is designed to measure the performance of the U.S. equity market and its construction helps it avoid less liquid, low priced and lower quality stocks. The index combines the S&P 500, S&P MidCap 400 and S&P SmallCap 600 and captures…