Merrill Lynch have made the first set of changes to their index launched appropriately on April 1st. The minor tweaks reported by ML include the removing six of the twenty five companies, adding three new ones with equally dubious relations to nanotechnology, redefining the criteria for inclusion, and rebalancing the index quarterly instead of the planned semi-annually (although fortnightly seems to be the current patttern).
While we had some fun with CBS Market Watch not being able to tell the difference between FEIC and FEI, ML have made an unannounced change (perhaps after reading this) from Cabot Microelectronics to Cabot Corp, one of the worlds largest producers of nanoparticles. So, we make that seven worms out, and four worms into this particular can, or perhaps ML need some help with their maths? What next, a bank that can’t add up? – well given the scale of the cock up so far admitting one more error shouldn't make too much difference. In fact doing some research and due diligence before launching an index tends to be the norm, at least in the financial circles we move in.
Duck and Cover! Here come the law suits from the excluded companies.
Some may suggest that this indicates that the index was a rushed job, that Merrill Lynch do not appear to have much idea of what they are doing dabbling in nanotechnology, or why. Others have commented that this made them the laughing stock of Wall Street.
Yet others, especially on 'the street,' may point to the article below having ruffled some feathers among senior management.