MSCI Index

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Overview:

In a significant development global index provider MSCI has announced the inclusion of nine stocks in its MSCI Global Standard Index, effective as of the close of November 30, 2023.

About MSCI Index

  • It is owned by the multinational investment management and financial services company Morgan Stanley.
  • It is an investment research firm that provides stock indexes, portfolio risk and performance analytics, and governance tools to institutional investors and hedge funds.
  • It is a leading provider of critical decision support tools, including stock indexes, and services for the global investment community.
  • MSCI indices facilitate the construction and monitoring of portfolios in a cohesive and complete manner, avoiding benchmark misfit. It has over 160,000 indices in its portfolio.
  • MSCI has indexes for countries, regions, emerging markets, developed markets, small cap, all cap and even Islamic indexes.
  • It selects stocks for its equity indexes that are easily traded and have high liquidity, with companies having high free float getting more weightage.
  • It prefers stocks that have active investor participation, and are without owner restrictions.

Key facts about MSCI India Index

  • It is designed to measure the performance of the large and mid-cap segments of the Indian market.
  • With 113 constituents, the index covers approximately 85% of the Indian equity universe.
  • The index is reviewed quarterly.

Q1) What are Hedge funds?

Hedge funds are investment funds that pool capital from accredited individuals or institutional investors to employ various strategies in financial markets with the goal of generating high returns. They typically have more flexibility compared to traditional investment funds, allowing them to use leverage, short selling, derivatives, and other techniques to pursue gains.

Source: MSCI Index Rejig sees the addition of nine stocks in Standard Index including Suzlon Energy, Paytm, Tata Motors DVR; No exclusion from India