MSCI Plans to Launch A-share Thematic Investing Indexes
What’s new: Index provider MSCI Inc. said it will launch a series of thematic indexes based on China’s A-share market within one year.
MSCI will consider two aspects for index construction: where investment opportunities are in the capital market, and global and local investors’ interests and needs, said Douglas Walls, head of Index Product Asia Pacific of MSCI, at a conference Tuesday.
Wei Zhen, head of index solutions research at MSCI Asia Pacific, called for Chinese regulators to further address market access issues and bring China’s market mechanism more in line with international standards.
The background: Global investors’ interest in China’s A-share market has expanded as China outperformed global equity markets broadly over the past three years. The MSCI China Index outperformed the MSCI USA Index by almost 10% in the first quarter of 2020. The initial inclusion of China A-shares in the MSCI Emerging Markets Index has also encouraged foreign institutional investors' participation in China's domestic equity market.
Globally, MSCI has launched nine thematic investing indexes, which are designed to capitalize on opportunities created by macroeconomic, geopolitical and technological trends. Security selection and weighting decisions are driven by a company’s exposure to a theme as measured by its economic relevance scores rather than market cap alone, according to MSCI.
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