Hi everyone,
I know it might be easy, but I have really a diculity to distinguish between an asset class being exclusive and being exhaustive. Can anyone give me an example of each?
Like: Is large cap is an asset class? why yes and why not?
For asset classes to be mutuallly exlusive an asset can’t fit into more than one asset class. i.e. the assets must be either large cap val, large cap growth…it can’t be both.
For asset classes to be exhaustive, they must must incorporate all reasonable assets. i.e. large cap growth, large cap val, small cap growth, small cap val. This incorporates all equities and therefore is exhaustive…
i.e. the assets must be either large cap val, large cap growth…it can’t be both.
Isn’t what your describing a sub-asset class of an asset class, not the asset class itself? I always thought asset classes were equities vs. fixed income vs. real estate etc?
Thank you Pohkhim
Mutually exclusive: appears only once (in one category or class).
Exhaustive: all assets were considered.