HSBC says investors should look at where companies make their revenue

Equity investors who look at indexes based on revenue rather than domicile will discover an entirely different investment universe, according to HSBC.

Global indexes are based on domicile. The MSCI U.K. Index, for example, is composed of companies from the U.K. But as two-thirds of their revenue comes from overseas markets, the index isn’t really providing investors with exposure to the U.K., HSBC analysts wrote in a new report.

All the companies in the Dow Jones Industrial Average DJIA, -0.20% are based in the U.S., but more than 40% of the overall revenue is derived from outside the U.S.

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