Fifty Shades Of Indexing

In investing, every little nuance can be decoded with a metaphor derived from Shakespeare’s plays. It would be absolutely natural, therefore, to tag passive investing as a sedate monologue delivered by the peace-loving King Duncan and active investing as a blood-curdling conversation between the ambitious Macbeth and the three witches. The former, usually performed by replicating an index, does not seek to outperform the market. The latter, however, aims at just the opposite – outdo the market by all means possible. Well, indexing as we know it is a here-and-now tale, one with a slightly hazy beginning, an inspiring middle and, clearly, a brilliant future. Investing has never been the same ever since index-based practices came to the fore, and it is with some satisfaction that I underscore some emerging trends in India’s indexing space. In the beginning, let us...