MacroVoices #416 Mike Green: Inflation is Dead? Can You Buy Commodities Anyway?
Macro Voices
Impacts of Market Cap Weighting
Market cap weighting does not equate to liquidity weighting or market impact weighting. The significant difference in investment amounts between large companies like Apple or Microsoft and smaller companies like Delta Airlines leads to a distorted impact. Academic literature is increasingly addressing this issue, highlighting the concentrated impact on larger companies within the index.
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