Our Methodology

A Disciplined, Systematic Approach to Global Stock Selection

At the heart of every MarketGrader Index is a comprehensive, fundamentals-first research engine. We evaluate tens of thousands of public companies daily using our proprietary GARP + Quality framework—designed to identify the world’s most consistently wealth-creating businesses, no matter their size, sector, or country of domicile.

Our Methodology

Every MarketGrader Index begins with a rigorous, daily analysis of the global equity universe. We evaluate more than 41,000 publicly traded companies using a standardized, fundamentals-driven framework designed to identify the world’s most durable long-term wealth creators. This foundational analysis fuels our systematic approach to index construction, where we combine market beta with superior company selection to build smarter indexes for institutional investors and long-term allocators.

Our Company Ratings: A Universal Framework for Global Equity Selection

A Standardized, Global Lens

Our quantitative framework evaluates every company using the same core principles, regardless of size, sector, geography, or business model. We apply 24 fundamental indicators, grouped across four categories: Growth, Value, Profitability and Cash Flow.

Each indicator is scored on a nine-point letter scale (A+ to F), then converted into a numerical value. These values are aggregated to produce a final MarketGrader Score from 0 to 100. This overall grade enables global standardization, allowing us to compare companies objectively and consistently—whether they’re based in New York, São Paulo, Mumbai, or Tokyo.

Based on their score, each stock is rated as: Buy (above 60), Hold (between 50 and 60), Sell (below 50).

We assess growth holistically—from revenue to earnings per share—across short- and long-term horizons. We look for companies demonstrating profitable, sustainable growth, with clear signs of capital discipline and a viable business model. Rapid top-line expansion alone isn’t enough; the growth must contribute meaningfully to long-term shareholder value.

We evaluate valuation in the context of business strength and growth prospects. A company trading at a high multiple may still merit a strong grade—if that multiple reflects true intrinsic value creation. Conversely, we flag value traps: low-multiple stocks masking deteriorating business fundamentals.

We focus on companies with strong and repeatable profit margins, high return on equity, and prudent capital allocation. Our profitability indicators identify management teams that operate efficiently and reinvest effectively—traits essential to long-term wealth creation. For financial institutions, we adjust for their unique capital structures and margin dynamics.

We prioritize companies with robust free cash flow generation and smart capital deployment. This includes scrutiny of capex discipline, leverage levels, and return on invested capital. For banks and other lenders, we evaluate solvency, asset quality, and balance sheet strength, aiming to anticipate potential shareholder risks during economic stress.

Index Construction: From Ratings to Investable Strategies

MarketGrader’s index construction process translates our global fundamental ratings into a disciplined system for building high-conviction, market-representative equity indexes.

Every index begins with the same starting point: over 41,000 public companies globally, each evaluated daily using our GARP + Quality framework. From there, we apply a rigorous, rules-based filter designed to identify the most fundamentally attractive companies in each market.

~8,700 companies meet basic investability thresholds

~5,500 earn a Buy rating

Fewer than 2,400 have historically been selected into a MarketGrader Index

Importantly, these figures fluctuate over time based on corporate fundamentals—not on pre-set quotas. Our grading scale is absolute, not relative, meaning a company’s score reflects the intrinsic strength of its financials and business model, not its rank within a peer group. This allows our methodology to reflect true market conditions and maintain high analytical integrity.

Together, this distillation process narrows the global universe to roughly 6% of the investable landscape—an elite group of consistent value creators selected for their long-term growth, quality, and capital efficiency.