MSCI’s decision to delay the addition of A-shares to its global benchmarks is not surprising. Earlier this month, the index confirmed such a delay was possible. However, MSCI did note it could move to add A-shares to its global indexes outside of its regular market classification schedule if China moves to resolve the index providers concerns.
On May 26, MSCI rival FTSE Russell said it will transition A-shares into global benchmarks, meaning A-shares will eventually join the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO), the largest emerging markets ETF by assets. However, $1.7 trillion tracks the MSCI Emerging Markets Index, the underlying index for the iShares MSCI Emerging Markets ETF (NYSEArca: EEM), meaning MSCI’s treatment of A-shares is widely followed by global investors. [A-Shares ETFs Surge on FTSE News]
At the end of the first quarter, there was $9.5 trillion in global assets benchmarked to MSCI indexes.
Tom Lydon’s clients own shares of EEM.