Global Horizon Fund
triangle economic triangle information triangle social

Balance is Golden

The Wealth of Nations Triangle Index measures the sustainable economic and social development potential of a nation and related risks, against those of other nations.

Like Aristotleís Golden Mean, the Wealth of Nations Index idealizes balance. It is based on the dogma of development experts and world travelers alike that highly developed countries are distinguished from poor and developing countries by their success in achieving balance between economic, social, and information environments. Countries achieving or moving toward such balance are most likely to attract capital from the rest of the world in the form of pension-fund and portfolio investments, director foreign investments and debt financing.

The Index enables investors and asset managers to explore the investment potential, openness to international investment, operating efficiency and relative riskiness of a given country. It does not measure, nor does it forecast, near-term changes in a nationís economic performance or the performance of local stock markets.

The Index is built on the premise that countries must develop and balance their economic, social environment, and information exchange infrastructures to achieve sustainable growth. Thus, Economic Environment, Social Environment, and Information Exchange variables make up equal legs of an equilateral triangle.

Each of the three legs of the Index contains 21 variables, chosen for both their relevancy and consistency over the years. Each variable is given equal weighting, based on a desire for simplicity, transparency, and balance among the three legs. Different weightings can be applied to each of the variables depending on the specific objects and criteria of the user.

All variables are tabulated on a relative basis, comparing one country score to another. Whether the original data is in U.S. dollars, PPP dollars, percentage of GDP, penetration of a given product (such as cellular phones) per 1,000, or a relative index, it is converted into an Index score from 0 to 100, with 0 representing the worst performance against all other nations and 100 the best performance. When computing Index scores, results from five developed nations (Japan, Netherlands, Singapore, Spain, and United States) are included, as the goal is to measure the relative gains of developing nations against the benchmark of developed nations. Index scores are combined for each leg and then totaled. The best possible score for each triangle is 800; the best possible overall score is 2400.