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Proposed: Increasing China A shares weighting in MSCI indexes

categories: Indexes, Asset Allocation and Asset Liability Management, Investing (Investment Management), Portfolio Construction and Optimization, Asia Pacific, Asset Owners, Hedge Funds, Equities, CHIA Chin-Ping, Asset Managers (Quant or Fundamental), Banks, general

MSCI recently launched a consultation on a further weight increase of China A shares, following the successful implementation of the 5% initial inclusion between May and August 2018. The proposal, if implemented, could boost China A shares’ weight in the MSCI Emerging Markets Index from .71% to 2.8% by August 2019 and to 3.4% by May 2020. The three core proposals are: increase the inclusion factor of the 235 China A Large Cap shares from 5% to 20%; bring 168 China A mid-cap shares into the index at a 20% inclusion factor; admit the ChiNext board in Shenzhen to the list of eligible stock exchange segments.

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