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Point of View · 03.04.24

MSCI Index Rebalances: China's Continued Decline

We analyze how the rebalances for the MSCI World Index and MSCI Emerging Markets Index affected composition and performance of the targeted securities.
  • Index Equity
  • Equity Insights
  • Portfolio Construction
Format
Key Points
What this is
We analyze the additions, deletions and weighting changes of the recent MSCI World Index and MSCI Emerging Markets Index rebalance.
Why it matters
Quarterly changes in indexes over time can impact the composition and performance.
Where it's going
The weighting increase to 18.4% for India marked a record high, demonstrating investors may need to reassess their exposure to specific countries that have seen significant changes in the index composition.
Main Point

Why Index Rebalances Matter

We think investors must remain vigilant during these periods to achieve the investment objective of replicating the risk and return metrics of the index. It is crucial to understand all of the dynamics that surround an index rebalance — liquidity, risk environment, stock specific news, off-setting trade flows — to shepherd index portfolios through the event with as little wealth erosion as possible.

Point of View

What Happens if Investors Remove China from Emerging Markets and Global Indexes

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