When assessing a potential investment within a given market, investors may want to consider the difference between total and free-float market capitalization. 

Traditionally, GDP growth has been thought of as a leading indicator for domestic stock-market performance. 

While most countries’ real GDP growth was buffeted in 2020 by the COVID-19 pandemic, the emerging market & developing economies were less affected (-3.3%) than advanced ones (-5.8%). 

As the COVID-19 crisis affected financial markets, all standard MSCI ACWI ESG equity indexes outperformed their market-capitalization benchmarks. Where has this outperformance come from? Have inflows into ESG investments driven up equity valuations, possibly creating a price bubble?

Just as country indexes can become concentrated in a handful of stocks, the same can happen with regions. 

Digital technology in all its many forms is now an integral part of our lives. 

With the stellar growth of a handful of large-cap companies, an index can become more concentrated, with more of the performance and risk driven by an increasingly smaller number of stocks. 

When stock returns are more spread out, that creates more opportunities for active managers.

Global benchmarks have understated the economic importance of emerging markets (EM) at times. 

MSCI Research looked at average pairwise correlation between countries’ USD returns within developed and emerging markets (EM) for the last 20 years.

Inflows into ESG funds have soared in recent years and months, in part motivated by outperformance since the COVID-19 pandemic erupted. But have these inflows become a self-fulfilling prophecy, creating an ESG bubble?

The coronavirus pandemic sparked a surge of volatility across global financial markets. What lessons could investors draw from the COVID-19 crisis? In this paper, we present and discuss empirical evidence supporting five key lessons for investors regarding global investing, managing factors, active management, indexed investing and ESG investing.

How did hedge funds navigate the initial volatility amid COVID-19? Though holdings information is limited, and delayed, we gained insights into their reaction by examining the change in hedge-fund portfolios between the end of January and end of February.

Asset owners use indexes as policy benchmarks and reference portfolios in their asset allocation. Index investors track cap-weighted indexes that seek to capture the market return. 

Measuring hedge funds’ positioning and potential crowding around stocks is of interest to many investors, given these funds’ reputation for outperformance. We explore the performance of hedge fund positions using MSCI HedgePlatform, which has advantages over U.S. Form 13F filings, including monthly data points, improved timeliness and full visibility of short positions.