Primary, Foreign Primary and Non Primary listings

What they are and how we decide which listing to use

With our expansion in new markets like Europe we needed a way to manage the multitude of listings for the same company. Take Ferrari for example. It's listed in multiple European exchanges as well as in the United States.

The data provider simply replicates the financials for each listing in the local currency. This presents lots of problems for our use case. If we do nothing but load whatever data is visible for a particular date you could end up buying different listings for the same company.

To solve this we first classify listings in three main ways: Primary, Foreign Primary and Non Primary.

Primary Listing

The key property of Primary listing is that only one exists in the entire world for a particular date. The decision of which listing is Primary is done by our internal algorithm. Every year at the end of June we decide which listing should be Primary for every company using a combination of factors (mainly liquidity and "good data") . If you only pick universes made up of Primary listings only you will never buy the same company twice in strategies for different regions. For Ferrari for example the Primary listing is the USA one, therefore only the strategies in the North American region will buy Ferrari.

Foreign Primary

Foreign Primary listing are the main listing for a specific region where there is no Primary listing. In USA for example all ADRs are automatically classified as Foreign Primary. For Ferrari the Foreign Primary in July 2022 is the Italian listing RACE:ITA. To buy Foreign Primaries you must use specific universes that include them. You normally should not use Foreign Primary universes if you invest in multiple regions to avoid the risk of buying the same company (for example RACE:USA and RACE:ITA).

Non-Primary

These are listings that are not loaded in out ranking engines. They could be a different share class in the same country or shares that trade in a different country than the Primary. They can only be used to invest in live strategies in lieu of the Primary (or Foreign Primary) being recommended for your own personal reasons. For example it may be more convenient for you to buy shares in a particular exchange. When you get a rebalance recommendation you will be given an option as to which listing to buy (this feature is not implemented yet).

Universes

We then created universes made up exclusively of Primary listings and others that also include Foreign Primaries. If you invest in multiple regions you would normally use universes made of of Primary listings only. For single region investing you can also use universes that include Foreign Primaries. Universes are clearly defined as to whether they have only Primary listings or a mix of the above. However, no matter of the compositions, all universes only have one listing of a company. For example under no circumstance a single strategy will recommend buying BRK.A and BRK.B.