MSCI Index-Based ETF Assets Cross $1 Trillion Mark | ETF Trends

Exchange traded funds that track MSCI indices have now accumulated more than $1 trillion in assets under management.

ETFs linked to MSCI-based indices have attracted $1 trillion as of November 16, 2020. This milestone demonstrates the widespread adoption and use of MSCI indices and the global investment community’s confidence in the quality and representativeness of MSCI’s indexes, related tools and client support, according to a recent MSCI note.

“This milestone reflects MSCI’s position as a leading provider of index solutions to ETF providers globally. We continue to see fast adoption of our indexes as institutional investors turn to them to help understand the global investable universe, build sustainable, diversified portfolios, and identify long-term financial risks and opportunities,” Diana Tidd, MSCI’s Head of Index, stated.

Asset growth in equity ETFs linked to MSCI’s indexes has been fueled by strong investor demand for transparent and liquid products to access global equity markets, with a more recent round of inflows driven by the increased attention on environmental, social, and governance, or ESG, factors and climate considerations, along with the heightened interest in factor index-linked strategies.

“The investment industry continues a tremendous transformation towards new opportunities including new geographies, new asset classes, new styles and strategies, and more sustainable investing. MSCI is positioned to be the change agent that helps investors stay at the forefront of that transformation and on the efficient frontier of risk and return, as well as the partner of choice for investors around the world who are seeking exposure to the world’s capital markets and need to understand the opportunity set,” Henry Fernandez, MSCI’s Chairman and CEO, said in a note.

For example, MSCI believes ESG, climate, factors, thematic, and fixed income investment will fuel the next leg of growth in the ETF industry. ESG and climate-related equity ETF linked to MSCI indices have attracted over $71 billion in assets, with seven of the ten largest equity ESG ETFs in the U.S. all based on MSCI indices. Furthermore, there are over 1,500 equity and fixed income ESG and climate indices that utilize MSCI ESG Research ratings and data, and the demand for standard and custom solutions in this area is growing.

“Over the past 50 years, MSCI has been a leader in providing indexes and other research-driven, technology-enabled tools and solutions for global investors, initially with market-cap indexes across geographies and industries. By focusing on establishing an innovation mindset, we have empowered our teams to explore creative, robust and holistic tools and solutions to help our clients make better informed investment decisions,” Baer Pettit, MSCI’s President and COO, said.

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