David Hernandez, CFA
Director of Traditional Manager Search
On May 31, 2018 MSCI decided to add 226 China large-cap A shares to the MSCI Emerging Markets (EM) Index. What is an A share? They are shares of Chinese companies that trade on local Chinese stock exchanges. Historically, foreign investors have had limited — if not zero — access to these markets. Three years ago, China launched its Stock Connect program, improving the accessibility to A shares and prompting their inclusion in the broad EM index. If A shares were just recently added, what constitutes the current 30.5% exposure to China? The China portion of the index is mainly comprised of the following:
By September 2018 China A-shares will constitute 0.8% of the index. This exposure represents a 5% inclusion rate of the A Share market and is tiny compared to the 16.2% exposure if MSCI used a 100% inclusion rate. While currently small, investors should expect A shares to become a larger portion of the index over the coming years, increasing the EM opportunity set.
The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.
The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.
10.01.2025
Please join Marquette’s research team for our 3Q 2025 Market Insights Webinar analyzing the third quarter across the…
09.29.2025
Trifecta status for a state exists when a single political party holds the governor’s seat and a majority in both…
09.22.2025
Barring a significant equity market drawdown in the coming weeks, the current bull market will turn three years old in…
09.15.2025
Earlier this year, Marquette published a Chart of the Week that detailed the muted change in oil…
09.08.2025
Commercial paper is a type of unsecured debt instrument that can be utilized by companies to finance short-term liabilities. The…
09.02.2025
In private markets, secondary transactions have increasingly gained attention and acceptance as a viable liquidity option for both general partners…
Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.
We respect your privacy. We will never share or sell your information.
If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.
Contact Us >