MSCI Inc. (NYSE: MSCI), a leading index provider to the ETF industry worldwide, is reporting a surge in demand from ETF providers for its factor indexes, with almost half of new MSCI index-based ETFs launched in 2014 linked to MSCI Factor Indexes1.
Overall, 95 ETFs based on MSCI indexes were launched in 20141, almost twice as many as the next index provider, with 42 (45 percent) of these linked to Factor Indexes, compared to six in 2013. 12 new ETFs tracking MSCI Multi-Factor Indexes, which combine more than one factor, were launched in 2014.
“2014 was a year of strong growth in the number of ETFs based on our indexes, in particular our factor indexes,” said Baer Pettit, Managing Director and Global Head of MSCI’s Index Business. “These numbers are evidence that our innovative index offering, combined with the strength of our brand, continue to make MSCI indexes the first choice of ETF providers around the world.”
Certain factors have historically earned a long-term risk premium and represent exposure to systematic sources of risk and return. Factor investing is the investment process that aims to harvest these risk premia through exposure to factors. MSCI currently calculates indexes on six key equity risk premia factors: Value, Low Size, Low Volatility, High Yield, Quality and Momentum.
With over 675 ETFs2 tracking MSCI indexes globally, more ETFs track MSCI’s indexes than those of any other index provider.
MSCI was named Best Index Provider for ETF Products 2014 at the ETF Risk European Rankings and was named Index Provider of the Year 2014 in three separate awards: the Financial News Asset Management Awards, the Global Capital Derivatives Awards and the European Pensions Awards 2014.
1 Source: Bloomberg and MSCI data, as of December31 2014
2 Data as of December 31 2014, calculated by aggregating the number of share classes of all exchange traded funds tracking an MSCI index, as identified by separate Bloomberg tickers. Only primary listings, and not cross-listings, are counted