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Beneficial owners survey methodology

17 January 2014


Global Investor/ISF has made big changes to the methodology of its beneficial owners survey

Read more: Beneficial owners survey

Regular readers of our annual beneficial owners survey will notice some substantial changes to this year’s methodology and presentation. The most substantial change is to the weighted tables. This year the raw data tables replace the unweighted tables.

They are identical – but with an easier to understand name – as the methodology remains a simple average of the relevant scores to that table.

The weighted tables were calculated using a three-stage process, allowing for how important respondents considered each service category to be, the size of the respondent’s lendable portfolio and differences in the generosity of respondents’ ratings in the three regions.

These tables have become our headline tables. We consider these adjustments improve the relevance of the results – that is why we made them. The other major change is to how the results are presented. The regional and global scores of the agent lenders, set out in alphabetical order, are positioned next to each other so readers can compare internationally at a glance.

Likewise, the service category scores are positioned so readers can identify the strengths and weaknesses quickly. The winning score in each case is coloured red. Due to the efficiency of presenting the results in this way, for the first time we have room to present both the weighted and raw data service category tables.


Methodology
Beneficial owners are asked to rate the performance of their securities lending providers. Respondents are asked to rate their service providers across 12 service categories (see below) from 1 (unacceptable) to 7 (excellent). There are two methodologies – weighted and unweighted.

Unweighted methodology
All valid responses for each lender are averaged to populate unweighted tables. All beneficial owners’ responses are given an equal weight, regardless of the size of their lendable portfolio. All categories are given equal weight regardless of how important they are considered to be by respondents. No allowances are made for regional variations.

Weighted methodology
Step one – weighting for lendable portfolio: The weighted table methodology makes allowances for both the size of the respondent’s lendable portfolio and how important the respondents, on average, consider each category to be – these were considered separately in the 2013 survey. An allowance is also made for differences between average scores in each region to make meaningful global averages.

Weightings are attached for the size of the respondent’s lendable portfolio. This means a greater weight is given to the views of larger beneficial owners relative to smaller ones.

Weightings are generated according to the size of the respondent’s lendable portfolio. The boundaries are set, based on data collected in the 2013 survey, so that there is an equal amount of beneficial owners in each group (<$500m and $500m-$2bn are given an equal weight of 0.6 as they contained half as many responses each as the other bands in 2013 – the information is collected separately only because it is useful when analysing the data). The mean band of $5bn-$20bn is given a weight of 1 – logically, an average client is given a neutral weighting.


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