There is logical contradiction in the asset industry today:- It conceals a great lie.
If a company structures itself into a conglomerate (usually with the lowest 'asset management fees' read directors emoluments) the investment bankers, portfolio managers and financial press harangue management to break up the portfolio so as to supposedly release the unpriced asset value.
I believe it is a tautology that in any portfolio, valuations are unlikely to be congruent - so the 'release the value' argument always endures.
Hereby not saying that the 'release value argument' holds tho' ...
For however - where a portfolio structures itself in a parallel suite of assets into it's portfolio, for the sake of argument, (irrespective of either active OR passive fees ) the pundits & financial press urge them to hold the same weak assets, so as to mitigate risk, and reduce the portfolio volatility.
The Markowitz CAPM risk reduction "free breakfast" is posited as the rationale, in this case.
In the latter case, 'the size matters' is espoused. Of course it does, especially where fees are charged on the portfolios size...
--------------------------------------------
Two asset managers sitting in a bar, both saying they are JESUS.
