Two Greater China indices launched by MSCI this month may leave lethargic fund managers quaking in their Guccis. The two new indices, Zhong Hua and Golden Dragon, are both calculated with dividends reinvested. That means the true performance of their fund managers can be judged.
For example, the average yield from dividends reinvested of all the stocks in Hong Kong's Hang Seng Index is 2.8%. As the Hang Seng doesn't take dividend reinvestment into account, investors could easily be misled in attributing that 2.8% 'growth' to their fund manager's performance. However, the manager may have done little more than to reinvest the dividends. Of course, few managers would care to draw their...
