Benjamin Felix

There's a couple of things that I want to add here.

One is I'd be very interested, Dan, to see the S&P TSX composite and capped composite side by side, but free float adjusted because S&P didn't start float adjusting their indexes until 2005, I believe.

I could imagine that Nortel would have had a lot of closely held shares.

They had a lot of shares in their pension plan, for example.

I'd be interested anyway.

I wonder how much free float adjustments mitigate that concentration risk in the index.

That's my hunch because that was in late 90s that that index concentration got so serious in Canada.

And I know that they changed to float adjusted weights in 2005.

On the idea of changing index methodologies, that's a huge one.

S&P in 2004, they announced that in 2005, I believe that they would start free floating.

Prior to that, they were not using free float weights.

I found an article about this from 2004.

It's all focused on

The sense of most index users is that float adjustment reduces the costs of running index funds and ETFs because stocks with less float and therefore less liquidity have lower weights in the index.

Index users also feel that basing the index on available shares instead of total shares means that the index is a better reflection of the market and through the market of the economy.

It's actually super interesting.

I wish I'd looked at this earlier.

In an October 2003 concept paper prior to announcing the decision to move to float adjustment, S&P highlighted reasons against the switch.

We looked at the academic and theoretical basis for indexing, but found no arguments for or against float adjustment, said Blitzer.

Side note, David Blitzer was an early guest on this podcast.