Market Overview

Don't Have Your Eye On China? You Should

Don't Have Your Eye On China? You Should

On June 20, mainland Chinese equites (A-shares) are again up for inclusion into MSCI’s definition of China within their Global Standard Indexes. Why is this important to global investors? MSCI indexes have $10 trillion in benchmarked assets with $1.6 trillion tracking the MSCI Emerging Markets Index alone1. The inclusion could trigger significant inflows into mainland Chinese equities.

We believe there has been a positive change in the tone of this year’s consultation released by MSCI leading up to the decision.

Changes to MSCI's Global Standard Index rarely occur, and can have a dramatic impact on the affected markets due to fund flows from asset managers that benchmark to MSCI emerging markets.

The following charts show what happened when MSCI added the United Arab Emirates, Qatar, and Pakistan to its emerging market index. 


As the world's second largest economy and stock market, investment in China A-Shares is still underrepresented in global capital markets.


The webinar below explains in more detail how the announcement on June 20 could affect the Asian markets.

1) Data from MSCI as of 6/30/2016, as reported on 9/30/2016, retrieved 5/01/2017

Image source: Pixabay

Posted-In: Long Ideas Emerging Markets Emerging Market ETFs Markets Trading Ideas ETFs General Best of Benzinga


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