MSCI Index Rebalancing: Know All About it

The MSCI Global Standard Index and MSCI India Smallcap Index are expected to result in significant inflows due to adjustments that could surpass couple of billion dollars on May 31st in the Indian equities markets.

The weight of India in the MSCI Emerging Markets Index will rise from its current 18.3 per cent to 19 per cent.

Announced on May 15 and going into effect on May 31, the quarterly rebalancing of the MSCI Global Standard Index comprises the addition of 13 stocks and the removal of three.

Indus Towers, Bosch, Canara Bank, Jindal Stainless, JSW Energy, Mankind Pharma, NHPC, PB Fintech, Phoenix Mills, Solar Industries, Sundram Finance, Thermax, and Torrent Power are among the new additions.

In contrast, the following three stocks have been removed from the index: One97 Communications (Paytm), Indraprastha Gas, and Berger Paints.

According to MSCI, Chandra Asri Pacific (Indonesia), JSW Energy (India), and Canara Bank (India) will be the three biggest additions to the MSCI Emerging Markets Index based on the entire market capitalization of the companies.

What is MSCI?

This investment research company offers institutional investors and hedge funds benchmark stock indexes, portfolio risk and performance analytics, and governance tools.

The most well-known output of MSCI are its benchmark indexes, which are managed by MSCI Barra and comprise the MSCI Frontier Markets Index and MSCI Emerging Market Index. Every year, the company continues to introduce new indexes.

MSCI has over 160,000 indexes available. The All Country World Index, Frontier Markets Index, Emerging Markets Index, and EAFE (Europe, Australasia, and the Far East) Index are a few of the most popular ones.

MSCI ACWI (All Country World Index)

The ACWI, or MSCI All Country World Index This global equity index, which tracks the performance of small- to large-cap stocks from 23 developed and 24 emerging markets, is the company's flagship offering. The companies represented by the more than 2,900 stocks are multinational corporations. In each of the markets it includes, it represents roughly 85 per cent of the market capitalization.

MSCI EMI (Emerging Market Index)

This index, which was introduced in 1988, includes components from 24 emerging economies, which include China, Egypt, India, Korea, Thailand, Brazil, South Africa, and Mexico. It aggregates the market capitalization of all the firms listed on the stock exchanges of these nations.