index funds

MSCI Launches Real-Time Indexes

index funds

Morgan Stanley Capital International (MSCI) today launched over 750 global sector, regional, and country indexes that will be updated in real time. The indexes cover developed markets and Asian emerging markets, and will be updated every 60 seconds for 23 hours each day.

The indexes are broken down into 10 sectors, consistent with MSCI's Global Industry Classification Standard (GICS), an organizational system developed jointly by MSCI and Standard & Poor's (S&P). The industry sectors are: consumer discretionary, consumer staples, energy, financials, healthcare, industrials, information technology, materials, telecommunication services, and utilities. Several MSCI derivatives indexes will be calculated every 15 seconds.

The real-time updated index series is unique in that it allows a fund manager or investor to form a clear and continuous picture of the world using MSCI indexes. And since the index methodology is constant, meaningful comparisons between sectors, regions, and countries are possible.

"The availability of real-time index quotes will assist us in our portfolio
management activities, as we'll be able to calculate tracking error on our
trading strategies in an even more accurate way," said Steven Schoenfeld,
Head of International Equity Management at Barclays Global Investors (BGI). "In addition, investors in our iShares MSCI exchange-traded funds (ETFs) will have another tool with which to measure our performance."

"Investors in MSCI iShares [some formerly known as WEBS or World Equity
Benchmark Shares] have long known the value of real-time pricing," added Brad Zigler of BGI's iShares Marketing and Education. "Now the
indexes themselves can be priced minute-by-minute just as the ETF shares
have been."

This latest move by MSCI underscores the heated competition between index providers to build better benchmarks as the popularity of passive investing increases. The big index providers - MSCI, Salomon Smith Barney, FTSE, Dow Jones, and S&P - are in a tight race to define sectors and consistent frameworks as emerging markets and a dynamic global economy have changed the way investors view the world.

MSCI estimates there is $3 trillion tied to its indexes.

To read an interview with MSCI about the Global Industry Classification Standard, click here.