Stratified sampling is an enhanced indexing strategy in bond investment. Stratified sampling is NOT an enhanced indexing strategy in equity investment.
am I right?
i think you can use it for both.
it is just a indexing method.
I would say not
its referred to as enhanced indexing for bond investing but the term is not really used for stock investing
LOS 27.f: Compare full replication, STRATIFIED SAMPLING , and optimization as approaches to constructing an indexed portfolio.
Stratified sampling, or cell matching, is used as an enhanced indexing method for both FI and equity.
right, but it is not called enhanced indexing in reading 27…it is called stratified sampling
You’re right, I guess you would call it a “regular” indexing strategy for equity. Thanks for the clarification.
I wouldn’t call it enhanced indexing. It’s a cheap method of approximating an index; I guess you could use stratified sampling as an enhanced index strategy if you try to pick undervalued securities in each ‘box’, but that’s not the nature of the game.