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      <plainLiteral>The coordinate system that locates any economic activity or resource by what it does and where it falls in the order of work, parallel to latitude/longitude in space and date/hour in time. Patent-backed (US 9,910,910; US 10,019,509).</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-coordinates</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-coordinates</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Functional Coordinates</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-coordinates</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2013</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-coordinates</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-information-system-fis</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The system that augments economic and financial data with standardized functional references, making business, employment, product, and service data unified, searchable, and stable across time and geography. Patent-backed (US 8,990,268; US 9,098,564; US 9,361,358).</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-information-system-fis</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-information-system-fis</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Functional Information System (FIS)</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-information-system-fis</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2014</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-information-system-fis</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-location</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The position an economic element occupies in functional space, determined by what it does rather than where or when it operates. Patent-backed (US 11,657,026; US 12,242,431).</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-location</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-location</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Functional Location</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-location</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2014</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-location</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-proximity</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The measured distance between two functional locations, enabling comparison across otherwise unrelated entities.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-proximity</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-proximity</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Functional Proximity</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-proximity</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2014</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-proximity</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-query</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The retrieval method in which entities are found by functional coordinate rather than keyword, returning complete functional populations instead of name matches.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-query</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-query</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Functional Query</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-query</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2017</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-query</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-space</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The n-dimensional space in which functional locations are computed, compared, and traversed. Patent-backed (US 12,242,431).</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-space</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-space</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Functional Space</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-space</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2014</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-space</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-trajectory</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The computed path an element traces through functional locations over time. Patent-backed (US 11,151,096).</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-trajectory</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-trajectory</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Functional Trajectory</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-trajectory</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2017</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-trajectory</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-twins</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The accurate functional representations that mirror real-world resources and activities inside the model.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-twins</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-twins</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Functional Twins</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-twins</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2026</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-functional-twins</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-index-construction-and-portfolio-classification</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>Built the Syntax Stratified Indices, benchmark indices constructed on functional rather than conventional sector classification.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-index-construction-and-portfolio-classification</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Index construction and portfolio classification</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-index-construction-and-portfolio-classification</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>expert</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-index-construction-and-portfolio-classification</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-labor-barcode</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The four-field barcode capturing a job's functional role in the economy.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-labor-barcode</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-labor-barcode</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Labor Barcode</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-labor-barcode</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2019</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-labor-barcode</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-functional-markers</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The coded functional references derived from the Production System Model and assigned to entities in the FIS database.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-functional-markers</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-functional-markers</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Locus Functional Markers</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-functional-markers</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2017</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-functional-markers</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-language</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The formal language of the model, in which activities function as verbs, resources as nouns, and a locus is a complete sentence describing real economic phenomena.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-language</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-language</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Locus Language</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-language</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2019</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-language</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-model</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>A theoretical framework that defines the internal parts and processes of any product-producing system, giving every activity and resource a functional identity and an ordered position.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-model</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-model</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Locus Model</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-model</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2013</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-model</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-theory</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The comprehensive systems theory of all activities and resources used in an economy, stated in two branches: the Locus Theory of Economic Systems and the Locus Theory of People.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-theory</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-theory</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Locus Theory</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-theory</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2019</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus-theory</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The base unit of economic activity: a single pairing of an activity with the resources required to produce its output, which together fix the activity's position in economic space.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Locus</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2013</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-locus</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-mergers-and-acquisitions</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>Managing Director in M&amp;A at PaineWebber, 1981–1990.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-mergers-and-acquisitions</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Mergers and acquisitions</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-mergers-and-acquisitions</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>advanced</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-mergers-and-acquisitions</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-natural-functional-order</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The stable, invariant sequence of positions that every ongoing economic system must fill, independent of geography, culture, technology, or era.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-natural-functional-order</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-natural-functional-order</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Natural Functional Order</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-natural-functional-order</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2026</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-natural-functional-order</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-pharmaceutical-royalty-finance</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>Founded and built Royalty Pharma into the world's largest acquirer of pharmaceutical royalties, helping create the category as an investable asset class.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-pharmaceutical-royalty-finance</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Pharmaceutical royalty finance</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-pharmaceutical-royalty-finance</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>expert</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-pharmaceutical-royalty-finance</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-precision-gene-editing-agricultural-biotechnology</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>Led Cibus's application of production-system methodology to plant biology through the Rapid Trait Development System.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-precision-gene-editing-agricultural-biotechnology</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Precision gene editing / agricultural biotechnology</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-precision-gene-editing-agricultural-biotechnology</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>expert</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-precision-gene-editing-agricultural-biotechnology</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-production-system-model</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>The model identifying and defining the parts and processes necessary to produce a product, from which functional markers are derived.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-production-system-model</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-production-system-model</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Production System Model</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-production-system-model</uri>
      <uri>http://schema.org/termCode</uri>
      <plainLiteral>coined, 2017</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-production-system-model</uri>
      <uri>http://www.w3.org/1999/02/22-rdf-syntax-ns#type</uri>
      <uri>http://schema.org/DefinedTerm</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-rapid-trait-development-system-rtds</uri>
      <uri>http://schema.org/description</uri>
      <plainLiteral>Cibus's precision gene-editing platform for agricultural trait development, applying production-system methodology to plant biology.</plainLiteral>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-rapid-trait-development-system-rtds</uri>
      <uri>http://schema.org/inDefinedTermSet</uri>
      <uri>https://theroryriggs.com/#termset</uri>
    </triple>
    <triple>
      <uri>https://theroryriggs.com/#definedterm-rapid-trait-development-system-rtds</uri>
      <uri>http://schema.org/name</uri>
      <plainLiteral>Rapid Trait Development System (RTDS)</plainLiteral>
    </triple>
    <triple>
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      <plainLiteral>Towson Remmel</plainLiteral>
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      <plainLiteral>Winston Featherly-Bean</plainLiteral>
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      <plainLiteral>Zachary Hall</plainLiteral>
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      <plainLiteral>This article introduces a new passive weighting methodology for diversifying business risk: functional information system (FIS)–based stratified weighting. The FIS-based stratified-weight approach effectively diversifies related business risk (RBR), such as supply chain dynamics, customer groups, product types, or other operational attributes that affect groups of companies that share common earnings drivers. The proposed methodology addresses overconcentrations of business risk that regularly occur in capitalization-weighted or equal-weighted indexes. This approach maintains a diversified weighting of an index’s underlying business risks by allocating constituents to specific RBR groupings, defined using FIS classification, and then fixing the weight of each group via stratification. The motivation behind this methodology is the fact that stock performance is the result of business performance and diversifying business performance is the ultimate goal of a diversified equity index. The authors demonstrate the performance benefit of stratified-weighted versions of the S&amp;P 500 and S&amp;P MidCap 400 indexes over traditional market capitalization weighting and equal weighting, especially following periods of economic stress. They find that FIS-based stratified-weight indexes deliver consistent and significantly higher returns relative to standard capitalization-weighted market indexes and equal-weighted indexes (on average, 389 bps per annum for the S&amp;P 500 and 175 bps per annum for the S&amp;P 500 equal weight), while exhibiting comparable beta and volatility. This article proposes that these results are robust and are not related to the choice of the universe or to particular market conditions.</plainLiteral>
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Using the populations of the S&amp;P 500 and the S&amp;P MidCap 400 indexes, the authors compare the performance of stratified indexes created using their methodology to both market-capitalization-weighted and equal-weighted indexes comprising the same components. They find that the stratified indexes delivered higher returns and higher Sharpe ratios than the others.</plainLiteral>
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