MSCI's Big China Decision Looms Today

June 20, 2017

[Editor’s notes: 1) China has now been included in MSCI's Emerging Markets Index. 2) The following originally appeared on cboe.com. Matt Moran is CBOE's vice president of business development.]

For managers of global index portfolios this week, a big issue is whether or not MSCI will add China A-Shares to the MSCI Emerging Markets Index (MXEF). MSCI plans to announce its 2017 Market Classification Review on Tuesday, June 20, shortly after 4:30 p.m. ET.

A June 17 headline to a Barron’s story speculated …

“Will China Gain Entry to MSCI Indexes? The giant indexer has said no three years in a row, but this time may be different. Approval would offer a nice boost to China’s capital levels.”

And a June 15 headline for a story in the Financial Times noted …

“Defining moment for investors looms as MSCI rules on China. Index provider set to make call on including mainland A-shares in its EM benchmark.”

The MSCI Emerging Markets Index

The MSCI Emerging Markets Index captures large- and midcap representation across 23 emerging market (EM) countries. As of May 31, the index had a total aggregate market capitalization of more than $4 trillion and 830 constituent stocks.

 

 

Recent Price Performance

The MSCI Emerging Markets Index has performed well so far in 2017. As shown in the chart below, from January 6 through June 16, the total return (pretax with reinvested dividends) version of the MSCI Emerging Markets Index rose 15%, higher than some other well-known indexes.

 

 

 

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