MSCI preferred index provider for institutional ETF investors

Jul 3rd, 2013 | By | Category: ETF and Index News

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When it comes to international equity exchange-traded funds (ETFs), MSCI appears to be the preferred index provider among institutional investors, according to a recent study by Greenwich Associates.

MSCI preferred index provider for institutional ETF investors

MSCI appears to be the favoured index provider for institutional ETF investors.

The study, which looked at institutional investors’ deepening relationship with ETFs, found that 88% of US institutional ETF users and 100% of investment consultants name MSCI as their benchmark of choice.

The finding will come as welcome news to MSCI, which was recently deposed by FTSE and CRSP as index provider to 22 Vanguard ETFs holding some $131 billion in assets, including the world’s largest emerging markets ETF, the recently rebranded Vanguard FTSE Emerging Markets ETF (VWO).

Baer Pettit, Managing Director and Global Head of the MSCI Index Business, said: “MSCI is committed to providing high quality indices to the investment community and this recognition is validation directly from the industry that not only are we doing the right thing by our clients but that the index matters.”

He added: “The index is a critical tool for institutional investors. The Greenwich Associates study shows that institutions continue to embrace ETFs and, in turn, there will only be a greater emphasis on a fund’s underlying index.”

Among the other key findings in this year’s report is the role the index plays when selecting an ETF. Forty percent of institutions ranked the benchmarks used in ETFs among the top three factors they consider when assessing individual products.

The results of the study are based on interviews with 179 US institutional funds interviewed between February and April 2013 and include corporate pension funds, public pension funds, foundations and endowments, and large asset management firms. For the first time this year, investment consultants, insurance companies and registered investment advisors were also interviewed.

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