What is MSCI?
MSCI is an acronym for Morgan Stanley Capital International. It is an investment research firm that provides stock indexes, portfolio risk and performance analytics, and governance tools to institutional investors and hedge funds. MSCI is perhaps best known for its benchmark indexes- more than 160,000, which focus on different geographic areas and stock types such as small-caps, mid-caps, and large-caps. They track the performance of the stocks that are included in them and act as a base for exchange-traded funds (ETFs). As of June 30, 2019, there were $12.3 trillion in assets under management (AUM) benchmarked to the firm’s indexes.
What is an index rebalancing?
A rebalance is a periodic adjustment of existing constituents within the index
MSCI indexes are rebalanced bi-annually. When the announcement of the Index rebalancing weightage is confirmed, the ETFs and unit trust/mutual funds must also adjust their fund holdings to reflect the new rebalanced weightage (%) since their funds were created and benchmarked to the MSCI Index performance. On the days leading to the rebalancing or on the day itself, you will see heightened volatility and volume in the market.
When will the MSCI Index rebalancing take effect?
30 Aug 2021 for Malaysia as all the other MSCI indices will rebalance on 31 Aug 2021 and take effect on 1 September 2021. As 31 Aug is a national holiday in Malaysia, therefore the rebalancing will happen the day before for Malaysia.
Big caps inflow & outflow on Bursa Malaysia @ 30 Aug 2021
Outflow: Maxis, Dialog, Axiata, IHH, Tenaga, Topglove
Small caps inflow & outflow on Bursa Malaysia @ 30 Aug 2021
Outflow: IGB REIT, TIME Dotcom, Axis REIT, Guan Chong, Yinson