Jan 18, 2018| Factor Investing
Investors need a clear and consistent way to talk about factors. For more than 40 years, MSCI has defined how investors use factors to analyze risk and return, from individual stocks to entire portfolios. Factors are important drivers of portfolio performance and are well documented in academic research....Read More »
The emerging markets rally, the U.S. dollar’s depreciation and the resurgence of global growth were the top three drivers behind a double-digit rally in global equities last year. Stocks were led by the MSCI Emerging Markets Index’s 38% return. Developed markets, as represented by the MSCI World Index,...Read More »
Jan 11, 2018| General
As central banks continue to keep interest rates at historic lows, many institutional investors have turned to leveraged loans for their attractive yields.Read More »
The U.S. Securities and Exchange Commission’s liquidity rule is designed to protect investors from incurring significant transaction costs when the assets in their mutual funds are not liquid enough to sustain funds’ redemption policies.Read More »
Nov 29, 2017| ESG Research
Are ESG characteristics tied to stock performance? Many researchers have studied the relationship between companies with strong environmental, social and governance (ESG) characteristics and corporate financial performance. A major challenge has been to show that positive correlations — when produced —...Read More »
Nov 21, 2017| Real Estate Investing
Increasingly, institutional investors with international strategies tend to concentrate their search for attractive property investments in established Central Business Districts (CBDs) within “global gateway cities,” such as New York, London and Hong Kong.Read More »
In the age of big data, fundamental stock pickers face a major challenge. Stock selection typically depends on establishing research conviction in the operating models of companies, such as identifying inexpensive businesses that demonstrate sustainable competitive advantage, disciplined capital management...Read More »
Over the last decade, asset owners have implemented factor investment programs with a focus on domestic markets. Increasingly, they are also funding equity factor programs in international markets. Two catalysts are driving this trend. First, there has been a steady erosion in asset owners’ home biases,...Read More »
Jun. 21, 2016
It may be time for institutional investors to rethink whether to hedge their exposures to foreign currencies. Though hedging can help investors avoid losing money amid swings in the foreign-exchange market, the strategy can be an expensive one for investors based in countries with structurally low interest rates.
Apr. 26, 2016
In the past, institutional investors largely ignored currency hedging in their international equity portfolios.
Jan. 25, 2016
Low volatility is one of the few factors that have historically performed well in turbulent markets.
Sep. 15, 2015
Private real estate and other real assets have become a major component of many institutional investors’ portfolios in recent years, but risk management has lagged. A wide range of proxies and assumptions have stood in place of a solid risk management framework, with perhaps the most common risk model being … nothing.
Historically, the majority of global real estate returns have come from income, which has made up more than 80% of the total return over the past decade. In 2014, however, growth in asset values represented 43% of the total return — more than double its long-term average contribution.
Jul. 08, 2015
As companies expand their footprint globally, the geographic distribution of their revenues evolves over time and their economic exposures may diverge from their country of domicile and primary listing. We believe that this raises a critical issue for institutional investors.
Jun. 29, 2015
Private equity is both “private” and “equity.” The valuations look smooth from quarter to quarter, but in the long run, private equity shows a strong relationship with equity and is exposed to many of the same systematic factors that drive traditional assets.
Income is the principal foundation of real estate investment returns. For most markets, particularly over the longer term, the vast majority of the real estate return comes through income rather than capital appreciation. The income generating nature of real estate has become even more relevant in an era of ultra-low interest rates, and in the context of the search for yield.
Jun. 24, 2015
Institutional investors are increasingly gravitating towards multi-factor allocations as the preferred approach to factor investing. But how should factor indexes be combined?
Jun. 24, 2015
Some large institutional investors prefer the granularity of a bottom‐up factor model – the way risk is allocated across markets, styles, issuers and industries – while others may prefer a more aggregated view. These investors would rather decompose risk into a few broad themes, such as by grouping fixed-income risk across markets into a level and a slope factor.
Insights, data and commentary from MSCI Research about global investing, the movement of asset prices, investing for the long term, and risk and return to help investors make better-informed decisions.