MSCI Plans to Increase China A-Share Exposure

March 22, 2019 | David Hernandez, CFA, Director of Traditional Manager Search

After several years of consideration, in May 2018 MSCI added a small portion of the China A-share market to its Emerging Markets Equity Index using a 5% inclusion factor. After additional consultation following that successful implementation, MSCI recently announced plans to further increase the inclusion factor to 20% in three steps, with the final step occurring in November 2019.

This newsletter explains MSCI’s considerations in increasing the inclusion factor and the process the index will undergo in the next nine months to implement the increase, as well as an explanation of what an A-share is and what their future may hold for investors.

Read> MSCI Plans to Increase China A-Share Exposure

For further coverage on A-shares, reference our video from 2018’s Investment Symposium, “Getting “A” Share of the Chinese Market“, or two previous charts of the week linked above.

 

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.

David Hernandez, CFA
Director of Traditional Manager Search

Get to Know David

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.

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This chart description is for illustrative purposes only and its accuracy cannot be guaranteed. Please see full disclosures at end of PDF. General description: Combination column and line chart showing index weight and performance for China and India. Chart subtitle: There has been a significant divergence in performance between Chinese and Indian equities over the last few years. Chart source: Bloomberg, eVestment, MSCI as of December 31, 2023. Chart visual description: Left Y-axis labeled “Cumulative Return” and ranges from -25% to +150%. Right Y-axis labeled “MSCI Emerging Markets Weight” and ranges from 0% to 50%. X-axis labeled M/D/YY in six-month increments, from 12/31/15 to 12/31/23. EM Index weights are stacked columns, with China in light blue and India in light green, at the 6/30 increment for each year. China return is plotted in dark blue line and India return in dark green. Chart data description: Please contact us for the full dataset. End chart description. See disclosures at end of document.

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