MSCI Inc. (NYSE: MSCI), a leading global provider of investment decision support tools, including indices, portfolio risk and performance analytics and corporate governance services, commented today on Vanguard’s decision to change the target benchmarks of 22 exchange traded funds (ETFs) from MSCI’s equity indices and addressed the anticipated impact of this transition on its future financial results.
Baer Pettit, Head of MSCI’s Index Business, said, “We are disappointed that Vanguard will no longer use our indices as the basis for these exchange traded funds. The ETF market in North America is competitive and as it evolves, we will work with those ETF providers who seek to utilize independent, well-respected, and high-quality equity indices in their products. MSCI indices have been developed over 40 years to meet the specific needs of the world’s most demanding and sophisticated investors.”
MSCI indices are a widely accepted tool for measuring global equity performance and there are approximately $7 trillion (1) in total assets benchmarked to MSCI indices worldwide. In the United States, for example, more than 90% of all cross-border fundings by tax-exempt funds are benchmarked to MSCI indices (2). MSCI’s All Country World Index (ACWI) is increasingly being used as a benchmark for measuring total equity market performance by pension funds. Over the first nine months of 2012, ETF providers around the world have launched a total of 57 new ETFs linked to MSCI indices, including all of MSCI’s flagship indices.
Henry A. Fernandez, Chairman and CEO of MSCI, commented, “MSCI is a provider of a diverse set of investment-decision tools to more than 6,000 clients worldwide. The strategic decisions we have made over the past several years to diversify and enhance our product offering and our client base have made MSCI a market leader in indices, portfolio risk and performance analytics and corporate governance products and services.”