Global Investing

Many institutional investors now view global equities as a single broad asset class, shifting away from the “home bias” historically found in their total stock portfolios. Our research discusses the effects of taking a “one world” approach that includes emerging markets and small-cap equities. It also explores the role of growing new markets such as China-A Shares and frontier markets. 


 

Featured research papers and Blog posts


Does Turkey offer lessons for managing emerging-market currency volatility?

Blog Post - The recent 40% drop in the Turkish lira is part of a long-term trend of rising emerging-market currency volatility. Typically, investors do not hedge this exposure. Is it time to reconsider this approach?


Is Japan’s “lost decade” over?

Blog post - Since the early 1990s, Japan has suffered two decades of poor stock returns. Despite this, most Japanese investors maintain a heavy domestic equity bias — at a significant opportunity cost. Given the potential benefits of global diversification, is continued reliance on domestic stocks the wisest way forward?


CAN INVESTORS WIN A U.S.-CHINA TRADE WAR?

Blog post - With new tariffs in effect as of July 6, we investigate our earlier assertion that “while an expanded trade war could lead to a ‘lose-lose’ outcome, there could be greater impact for stocks in the U.S. Overall, they are more exposed to the Chinese economy than the other way around.”


Can your investment strategy work with China A shares?

Blog post - Many institutional investors have long viewed China A shares as an inefficient market, suggesting that active strategies such as stock-picking can thrive. However, researching a universe of over 3,500 stocks comes with huge challenges, and may lead investors to question whether factor-based systematic strategies could have worked well with China A shares.


Vive la Différence: Active Factor Strategies in China A Shares

Blog post - Can factor insights be applied to construct equity portfolios in the China A shares market? With the partial inclusion of China A shares in the MSCI Emerging Markets Index, we explore whether the China A shares market has distinctive characteristics that lend themselves to factor investing strategies.


International Small Caps are Alive and Kicking

Blog post - Investors eager to write the obituary of the size premium might want to put down their pens. Small-cap stocks in developed markets outside the U.S. have been on a decade-long run of outpacing their large- and mid-cap counterparts.


THE WORLD COMES TO CHINA

Blog post - Emerging markets may never be the same. On May 31, MSCI will include 226 China large-cap A shares to the MSCI Emerging Markets Index. Inclusion at a 5% initial weight could lead to approximately USD 22 billion of capital inflows into these stocks. What might investors need to consider as we approach this milestone?


EVALUATING OPPORTUNITIES IN ACTIVE MANAGEMENT

Research Paper - Success in active management is a complex interaction of two dimensions – market opportunity and manager skill. Where is the intersection of markets that have provided the greatest opportunity and where managers have delivered persistent outperformance?

Thinking Big About Small Cap Investing

Pension funds around the world have increasingly shed their home bias and incorporated global small-cap allocations, but they still fall well short of the 14% global small-cap weighting found in the MSCI ACWI IMI. We explain what they might be missing.

Is it time to change your number?

Investors have long sought equity indexes to measure exposure to the U.S. market and size segments such as large-, mid- and small-capitalization stocks.

MSCI Global Investing and Risk Management Conference

Please join us for the MSCI Global Investing and Risk Management Conference and Workshops to be held in London on May 15-16, 2018.