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The SGI CEO Value index tracks the performance of pan European stocks selected according to the CEO Model, a bottom-up approach chasing historically underperforming companies with solid performance recovery potential thanks to sound corporate governance principles.
The CEO Model, on which the index strategy relies, is based on the idea that companies which have solid corporate governance principles and have underperformed their peers would either abandon poor strategies and implement more efficient ones under ruling management or appoint a new top management that would do so, and finally deliver a higher performance.
The model applies a scoring method based on corporate governance and financial strength to a universe of pan European stocks filtered according to two parameters: the period during which the CEO has been in charge and the historical relative share performance vs. competitors.
The index is the equal-weighted basket of the top ranked stocks.