Measuring non-US. equity portfolio performance

The most widely used international return indexes are the Capital International Perspective (CIP) Indexes published in Geneva, Switzerland by Capital International S.A.’ The advantages of the CIP indexes are: 1. The uniformity of the calculation method and the base date allow easy and accurate comparison among the various indexes. 2. The indexes date back, in most cases, to 1959, creating an extensive database for research and analysis. 3. CIP provides industry indexes allowing for a comparison of industrial trends across national stock markets. 4. The separation into local currency and dollar-adjusted returns allows an explicit evaluation of the impact of the currency movements on the returns and risk of the non-U.S. markets. The main drawback of the CIP data is the limited and varied quality and depth of the market coverage. As of December 31, 1983, the companies included in the ”World Index” accounted for 59.9%