#Adani
#Active vs #Passive
NIFTY50 has both Adani Ports and Adani Enterprises in it.
Adani Enterprises is in essence a holding company that draws its value from the value of its subsidiaries, with no substantive business.
1/
#Active vs #Passive
NIFTY50 has both Adani Ports and Adani Enterprises in it.
Adani Enterprises is in essence a holding company that draws its value from the value of its subsidiaries, with no substantive business.
1/
While an Index is expected to be representative of the economy it represents, does it make sense to have holding companies in Indices.
Should there not be a rule for reducing the impact of double counting such instances.
2/n
Should there not be a rule for reducing the impact of double counting such instances.
2/n
As passive investments is becoming the preferred choice of vehicle for Pension funds wrt their equity allocations, should the index providers not consider eliminating double counting?
3/n
3/n
We have other twins too -
HDFC vs HDFC Bank
Bajaj Finserv vs Bajaj Finance
SBI vs SBI Life
4/n
HDFC vs HDFC Bank
Bajaj Finserv vs Bajaj Finance
SBI vs SBI Life
4/n
When an investor chooses, passive he is inherently shifting the power from a manager to the index provider and with power, he transfers responsibility too!
May be this episode gives a reason to review rules of Inclusion into Index for HoldCos
5/n
May be this episode gives a reason to review rules of Inclusion into Index for HoldCos
5/n
On a lighter vein, if market cap and free float are the only criteria, SBI Nifty ETF may find a weight in NIFTY!
Will be like mirror on opposite walls in saloon!
6/n - end
Will be like mirror on opposite walls in saloon!
6/n - end
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