MSCI launches tradeable emerging equity index

Index compiler MSCI launched a tradeable emerging equity index on Wednesday which contains 50 of its benchmark emerging index’s largest constituents, MSCI said in a statement.

The MSCI EM 50 index contains stocks from Brazil, China, India, Mexico, Russia, South Africa, South Korea and Taiwan as of Oct 4, MSCI said.

The larger MSCI emerging equities index, benchmarked by many emerging market fund managers globally, contains stocks from more than 20 countries including smaller markets like Egypt, Czech Republic, Poland and Hungary.

[caption id=“attachment_100309” align=“alignleft” width=“380” caption=“The MSCI emerging index has fallen 28 percent this year on global risk aversion, but some larger stock markets have outperformed. Reuters”]  [/caption]

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“We have seen significant demand from clients around the world for a tradeable version of our market-leading MSCI Emerging Markets Index – especially from those who face various obstacles in replicating broader emerging markets indices,” said Theodore Niggli, MSCI Managing Director, in the statement.

The MSCI emerging index has fallen 28 percent this year on global risk aversion, but some larger stock markets have outperformed.

Chinese stocks have fallen 16 percent, Indian stocks are down 23 percent and Korean stocks have dropped 19 percent.

Some investors are also currently more comfortable with positions in more liquid stocks, as liquidity has been drying up on global growth worries.

The new EM 50 index applies eligibility screens to exclude some of the smallest emerging markets and uses depositary receipts for certain markets that are less accessible to foreign investors, MSCI said.

Reuters