There is healthy demand among global investors for reliable and transparent indices and benchmarks to gauge sector-level and overall market performance. This demand coincides with investors seeking out cost-efficient investment strategies and shifting their asset allocations to lower-cost passive or index-based products, such as exchange-traded funds (ETFs), from actively managed funds. In India alone, passive Read more […]
In this blog, we investigate the dispersion of carbon intensity scores in detail and its effect on carbon-efficient portfolio construction via equal- and market-cap-weighted approaches. A company’s carbon efficiency is measured by its carbon intensity score (C.I. score), provided by Trucost, which is defined as the greenhouse gas (GHG) emissions from a company’s direct operations Read more […]
In India, the festival of lights known as Diwali brings with it a seasonal uptick in gold imports. A feature of this renowned festival involves the exchange of gifts among friends, families, and colleagues. The most popular gift to give during the festival is gold. The propitious sentiment toward the precious metal makes it a Read more […]
Fund managers typically follow a factor or a style of investing and aim to construct portfolios by balancing active sector exposures and stock-selection risks within a sector. Tracking error is one way to measure a fund’s deviation from its respective benchmark to determine how “active” it is. As measured in the SPIVA® India Year-End 2018 Read more […]
Investors typically flock to active funds to pass on the stock-picking decision making to a seasoned fund manager, with the hope that the fund manager’s experience and stock-picking capabilities will enable the investor’s portfolio to grow at a faster pace than that set by the benchmark. By using this approach, investors are able to circumvent Read more […]
Passive investment is emerging as the more viable and favorable option over active investing. Recommendations for passive investing are supported by statistics. The S&P Dow Jones Indices SPIVA® Around the World Report for year-end 2018 (see Exhibit 1) highlights the trend of benchmark indices beating active funds. Exhibit 1: SPIVA Year-End 2018 Results Source: S&P Read more […]
The Narendra Modi government will soon complete its five years in power. With polling underway to elect the next government, India is in election mode. Everyone is discussing politics and predicting the election results. The backers of the current government claim that the return of Modi will provide stability and ensure development. On the other Read more […]
Professionals in varied fields are often too busy to research, plan, and understand the best investment style. A common worry is the risk associated with equity markets. Yet this anxiety is primarily due to myth and inadequate knowledge. To protect, add value, and grow their assets, both institutional and retail investors face a myriad of Read more […]
The methodology of the S&P BSE SENSEX has seen many changes over the last 30 years. In October 2018, it was again modified after an extensive market consultation. The recent changes brought new clarity to the boundaries for entry and exit of stocks in the index. Constituents are selected by size and liquidity. Now, any Read more […]
Risk-adjusted returns showcase the return accrued for every unit of risk held in a portfolio. If two portfolios have the same returns over a given time period, the one that has the lowest risk will have the better risk-adjusted return. Modern portfolio theory (MPT) assumes that an investment with higher risk should compensate the investor, Read more […]
