International Equity Indices and Public Trust

Posted: 21 May 2019

See all articles by Lars Kaiser

Lars Kaiser

University of Liechtenstein

Date Written: October 31, 2016

Abstract

This paper makes use of a unique dataset accounting for public trust towards alternative institutions within 27 countries, thereby yielding a local perspective on the trustworthiness of governments, the media and the business environment as a whole. Our results indicate that this local perspective adds potential value for forming rational investment decisions in a global setting, which are not distorted by foreign perspectives. We take the perspective of a US investor by considering US dollar denoted international equity indices and build trust-based portfolios, which we compare to traditional market-capitalization-weighted, GDP-weighted, ΔGDP-weighted and equal-weighted portfolio schemes. We show that accounting for trust does entail valuable information for international equity allocation, especially with respect to fast growing emerging economies.

Keywords: Public Trust, Portfolio Choice, Asset Pricing, Emerging Markets, Developed Markets

JEL Classification: G11, G12, G15, D83

Suggested Citation

Kaiser, Lars, International Equity Indices and Public Trust (October 31, 2016). Kaiser, L. (2018). International Equity Indices and Public Trust. Journal of Investing, 27(2), 76-89. . Available at SSRN: https://ssrn.com/abstract=2686136 or http://dx.doi.org/10.2139/ssrn.2686136

Lars Kaiser (Contact Author)

University of Liechtenstein ( email )

Fürst Franz Josef Strasse
Vaduz, 9490
Liechtenstein
+423 265 1186 (Phone)

HOME PAGE: http://www.uni.li/lars.kaiser

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