Shares of investment research firm and index provider MSCI (NYSE: MSCI) plummeted 28% Tuesday on heavy volume after Vanguard said it was dropping the company’s benchmarks at many of its index funds and ETFs. Vanguard’s decision will result in MSCI losing revenue from index-licensing fees.
Vanguard announced Tuesday morning that it plans to change the tracking indices at 22 funds, including ETFs.
The asset manager will transition from the current MSCI benchmarks to indices managed by FTSE and the University of Chicago’s Center for Research in Security Prices (CRSP). [Vanguard Changing Indices for Several ETFs]
MSCI said the Vanguard funds being transitioned include $131 billion of assets under management, in 14 ETFs benchmarked to MSCI’s U.S. equity indices and 8 ETFs linked to MSCI’s global equity indices.
The transitions will be staggered and are expected to occur collectively over a number of months, Vanguard said.
“MSCI’s annualized revenue and operating income associated with the Vanguard funds being transitioned are approximately $24 million. The impact to reported financial results is expected to start in January 2013 as the funds are transitioned,” MSCI said in a statement.