We propose a risk-based framework to aid asset allocators, including wealth managers, in better understanding active ETFs as an investment category and to help discern between genuinely active strategies and enhanced indexing. 

Investors in private markets enter 2025 with USD 2 trillion in dry powder but also challenges such as historically low distribution rates and elevated interest rates. MSCI Research highlights four trends across asset classes that deserve investors’ attention.

Ashley Lester returns with his roundtable of experts from across MSCI Research and Development to examine the markets with a 360° perspective. The theme of the year is U.S. dominance. What will investors be watching as they seek to steady an unbalanced world?

Combining economic-exposure and geospatial data can help global equity investors gain a clearer picture of which firms and industries may feel the fallout if higher tariffs materialize. 

2025 will bring profound shifts driven by geopolitics, disruptive technology and environmental challenges. Discover how these unprecedented changes will shift the risk landscape for investors and translate into unprecedented opportunity.

Inflation has eased recently, but secular trends like surging debt levels, deglobalization, aging populations and supply-chain disruptions could keep it elevated in the longer run, along with rates. This scenario poses challenges for multi-asset-class investors.

The year 2024 marked commercial property’s tentative emergence from the downturn that began in 2022 with the sharp rise in interest rates. MSCI Research explores five key themes for investors to consider in 2025.  

As the calendar flips to 2025, Chief Research Officer, Ashley Lester and team identify and analyze the key themes that will dominate investor attention this year. 

The global carbon credit market remained on ice last year, with flat demand and declining prices. However, there are some signs of a coming thaw. If the ice melts, our projections suggest it could be worth USD 7 to 35 billion by 2030.

The RCA CPPI measure the actual price movements for commercial properties based on exclusive transaction data using repeat-sales regression methodology. 

The downturn in U.S. real-estate performance focused attention on the appraised values of properties, particularly those enduring the harshest reset. We discuss whether a more transparent measure of value would benefit investors. 

Tradable-bond indexes consist of the most liquid subset of corporate bonds. Maintaining sector and credit-bucket allocations consistent with the underlying benchmark, these indexes may help investors track the market while positioning in more-liquid securities.

Join us as we cover the sustainability and climate trends that our team thinks will shape the year head. We talk about energy transition opportunities that are emerging in private markets, rising social risks and big tech, falling data access for AI models and much more. Here’s to a big, intriguing 2025!

We present a global ranking of asset managers in real estate and infrastructure, based on a manager survey conducted by Property Funds Research.  

This guide is designed as a resource to equip readers with a thorough understanding of carbon markets, their operation and governance, and recent developments as well as an aid in navigating this critical dimension of the climate-finance landscape.

Our data-driven framework tracks economic and financial trends for a range of indicators to help clarify their multi-layered impact on China’s markets and economy, and aid global investors in right-sizing the China exposure in their portfolios.

A clear divergence in traded regional options has emerged since early November in both maturities and relative implied-volatility levels. These shifts imply changing perceptions of relative risk in the U.S., EMEA and EM equity markets.   

Coordination across sub-accounts of a U.S.-based individual investor can potentially uncover opportunities to more effectively manage tax liability. Our case study found this result independent of the client’s benchmark-tracking and tax preferences.

We explore the implications of a potential equity sell-off, where we hypothesize that less-risky, more-profitable firms with more-conservative investment practices prove more resilient than their competitors. 

Commercial-property asset managers face an insurance-cost burden that’s doubled in five years. We illustrate the rise and discuss the influence of extreme-weather events.

In concentrated markets, investors can become wary of portfolios dominated by sentiment factors. A simple crowding-score-based constraint can help investors identify securities most at risk of de-rating. 

We put out the world’s first public price forecast for CORSIA!* In it we analyzed the potential demand, supply and prices for credits under CORSIA, and how much the scheme could cost the airline industry in terms of higher ticket prices or lower profits. In this episode we explore the reports findings from one of its main authors. Enjoy!

*Based on review of publicly available carbon credit research and ratings providers, as of Nov. 1, 2024.

With fixed-income investors still recovering from a year that arguably saw nearly every cycle of the market, we look ahead to 2025 across sectors, including sustainability-linked bonds, securitized products and the ongoing effects of inflation and moves by central banks.

Continuous tax-loss harvesting, versus a dedicated year-end process, could potentially generate greater net realized losses. And with modern portfolio-management systems, it can be largely automated as part of a regular rebalancing cadence.

2025 could mark a turning point for sustainable finance, with the EU’s CSRD and global ISSB standards driving transparency. Financial institutions will need to navigate evolving frameworks, balancing compliance challenges with sustainability opportunities.

Could distress trends in leveraged loans offer a glimpse of future distress rates in private-credit senior loans? We chart the path for these loans, and private-credit mezzanine debt, since interest rates began to surge. 

Given real-estate assets’ increasing exposure to coastal, fluvial and pluvial flooding, it’s essential to understand the potential asset- and portfolio-level impacts of all three types. We analyze the exposure of more than 50,000 property assets.   

COP29 advanced international carbon trading with key agreements. Mixed signals on the energy transition, however, affirm investors’ view of an uneven transformation, while investment to address climate-driven physical risk looks likely to continue apace.

When investors assess risk, they construct narratives around the data. Investment managers and asset allocators can look to the long history of market sell-offs for context, to better anticipate future drawdowns and prepare portfolios for what the future may hold. 

This major new report examines the financial impact of CORSIA on airlines, assessing carbon credit demand, supply and prices. Our modeling shows that the cost of CORSIA carbon credits could add up to USD 2 (Phase 1) and USD 5 (Phase II) to average ticket prices.

What do market participants actually think is going to happen to their assets due to climate change? And when do they expect it? And do they think we will ever abandon fossil fuels? Well to answer those questions (and any others!), you need a survey. Luckily, we've got one! We've linked it below and created a podcast episode about it. Enjoy!

Link to the survey

The MSCI Analytics Summit in London brought senior industry experts together to explore the evolving landscape of risk management — what we’ve taken to calling the “future of risk.” Here are the key takeaways from the conference. 

The MSCI Analytics Summit brought together senior industry experts to explore the evolving landscape of risk management. Participants, including our guests for this episode — Rick Bookstaber and Raina Oberoi — exchanged ideas on how to navigate the complex challenges and opportunities in the market, the importance of integrating a risk culture within investment teams and how best to create a role for risk where it can truly serve to aid decision-making and portfolio resilience.

Spreads on corporate mezzanine loans in private-credit funds have fallen dramatically since 2022, changing the picture on the loans that are normally deemed higher-risk than senior loans. Funds treated real-estate borrowers differently, however. 

Mark Carver, Global Head of Equity Factor Products, shares global equity market performance highlights from last quarter and the entire year with changing market landscape.

Energy-hungry data centers are the backbone of AI. And as big tech companies look to meet rising demand for AI capabilities, their emissions are ticking up. So, are net zero ambitions at risk? Or can they be saved by a decades-old energy source in a new guise?

Global carbon-credit investment has surged in recent years with nature-based carbon projects attracting the most funding, driving emission reductions, sustainable development, biodiversity protection and job creation across developing regions. 

“Deconglomeration” in the 1980s signaled a shift to corporate specialization, particularly in the U.S. We found that diversified firms have tended to lag the profitability and growth of their single-industry counterparts.

Historic estimated losses from two recent hurricanes highlight the importance of understanding asset locations that face intensifying climate impacts. 

While monetary-policy easing has given investors some hope for a rebound in the global commercial-property market, rate cuts won’t solve all the challenges ahead. We outline the state of the recovery. 

Attendees at the MSCI Institutional Investor Forums in the U.S. and Canada agreed that the investment megatrends they see underscore the need to centralize risk in investment decision-making, making a total portfolio approach increasingly attractive.

Declines in European property prices have put lenders on watch for the impact on loan collateral. We present a tool to visualize the change in prices and the portion of assets that may be troubled.

The trend of companies engaging in offtakes for carbon credits may well continue, given a greater certainty for buyers and project developers than the traditional spot market. We look at some of the plusses and minuses behind this trend.  

VW announced it would shut at least three of its German plants, axe tens of thousands of jobs and slash pay by 10%. This is notable because VW is the powerhouse of Germany which typically has been the EU’s industrial engine – meaning jobs, meaning unions, meaning political might. But this is more than a VW story. It is a story of how the energy transition – the transition from pollutive to non-pollutive forms of economic operations – is upending the global order of established industries. It is the story of the hard tradeoffs we have to make in our effort to cut carbon emissions.

In this episode we explore that new world and what it means for the auto industry; an industry many countries and states rely on for their economic driver.

Using a simulation-based analysis, we demonstrate that in periods of high market concentration, both asset owners and asset managers could potentially benefit from considering a benchmark-splitting approach. 

We’re joined by MSCI’s Chief Research Officer, Ashley Lester and Chief Client Officer, Axel Kilian, who recently attended the 19th annual Institutional Investor Forum, hosted by MSCI. We discuss the benefits and considerations of a total portfolio approach, as well as the myriad of challenges facing asset owners and investors around the world.

COP16 highlighted the urgent need for biodiversity investments and regulatory measures, but failed to secure consensus on funding, posing risks to the implementation of global biodiversity goals. What does it all mean for investors? 

The global-market portfolio represents the aggregate financial assets of all investors worldwide. Institutions can benefit by monitoring its composition and evolution, to shed light on investor preferences, as well as trends in asset-class weights. 

We present an attribution framework for Principal Adverse Impact (PAI) indicators to help investors assess whether year-on-year changes within portfolio PAIs are within the influence of the portfolio manager or driven by factors outside their control.  

The total value of distress in the U.S. property market surpassed USD 100 billion by the end of the third quarter, though the pace of additional financial trouble did slow.  We summarize the biggest sources of distress across property types. 

The MSCI Similarity Score represents a significant evolution in wealth-management practice, aiding firms in balancing individual client needs with scalable processes and shifting perspective from a holdings-based analysis to behavioral similarity. 

Where does private-equity premium come from? Can private-equity performance be reproduced by leveraging up public-equity investments? What’s private equity’s outlook given that cheap borrowing is not expected to return in the foreseeable future? 

Our analysis found that biodiversity footprints and underlying drivers varied significantly across regions and sectors. Such information could help institutional investors quantify the impacts of their investments, as they build and manage portfolios. 

We evaluate European funds’ performance under sustainability regulations, including SFDR article 8 and 9 funds, EU Taxonomy alignment and new fund-naming guidelines, offering insights into regulatory developments and data improvements. 

Well, not yet. But on October 11, a UN expert group reached a compromise on key elements of a global carbon trading system. If it passes (we go into this, don’t worry), it will resolve nearly a decade of talks on a what is seen as a fundamental tool for the Paris Agreement to be achieved. Im this episode we discuss why this agreement is so important, and what it will do to the already up and running carbon markets.

The private sector could be key in solving the biodiversity crisis, with the VCM offering an established mechanism and important source of finance for nature-based solutions, potentially funding USD 100 billion of nature-based projects annually by 2050. 

Rising volatility since late September’s stimulus announcement by the Chinese government has motivated some to reassess the current opportunities and risks in Chinese equities. We analyze one tool at investors’ disposal.  

Our new framework links financial markets to macroeconomic factors, focusing on cash flows, discount rates, growth and inflation. It helps investors in their capital-market assumptions, risk management and asset allocation, using the MSCI Macro-Finance Model. 

Biodiversity is back on the investment agenda. While the sector is still in its infancy, improving data and standardization could unlock further opportunities. We take a deep dive and shed light on the current state of the sector. 

Heat waves are getting longer and more intense. And although mitigating climate change will remain a long-term priority, investors will also be thinking about adaptation technology. The humble air conditioner is an off-the-shelf solution, but does it have any downsides?

Listed U.S. real estate emerged as the second-best performing sector in Q3 2024. The recent decline in rates has likely boosted its appeal, but a more fundamental and compositional shift may have caught investors’ renewed attention. 

Investors might be concerned that escalating unrest in the Middle East could push oil prices higher, as geopolitical risk has once again come into focus for this group. A sustained rise in energy costs may fuel inflation and weigh on economic growth, affecting portfolios. 

Nature loss and climate change are linked, requiring integrated solutions, and although more market-based mechanisms and financial products are becoming available, greater clarity and consistency are needed to address the dual nature-climate crisis. 

From the effects of China’s stimulus to the power of sustainability on portfolio performance and companies cost of capital, our panel dissects the latest market drivers and where investors may be focused for the rest of 2024.

Private capital is fueling the climate transition, and transition-related investments are proving that profitability and sustainability can go hand in hand. Investors across all sectors can seize opportunities by understanding where capital flows in the supply chain.

The market for labeled bonds brings together issuers that wish to raise capital to finance various environmental and social commitments and build rapport with sustainability investors. We examine the key developments so far in the calendar year.

Not every lender in U.S. commercial real estate is at risk over their exposure to the sector. We illustrate how the timing of loan originations and the property types of the collateral can make a difference for lenders.  

Today is the last part of a three-part series we've done for ESG now: we examine whether investors should care about incorporating environmental data into equity analysis. In previous episodes we discussed the social pillar and the governance pillar, now it’s on to the environmental pillar of our ESG ratings model. We look at the environmental pillar as a whole and the themes that build it and tell you whether companies that scored well on each theme performed better than their lower scoring peers.

Our analysis suggests that incorporating ESG and sustainability considerations into Islamic finance not only aligns with the ethical mandates of Sharia law but also has the potential to improve financial outcomes. 

To adhere to ESMA’s fund-naming guidelines, sustainability-minded fund managers may have to choose between fund name and preferred investment strategy. Our analysis shows that almost 11% of MSCI ACWI IMI constituents by weight could become ineligible investments for such funds.

The small-size premium has declined over the last five years, with market dynamics, deglobalization and inflationary pressures playing contributing roles — a trend that has continued into 2024. We analyze the small-cap space across regions. 

Global institutional investors in Chinese equities, either using fundamental or quantitative approaches, may find potential opportunities in sector rotation and in factors’ deviations from their long-term patterns.

Interest-rate uncertainty and restructured trade networks are drawing attention to export-oriented markets. MSCI’s equity models, using foreign-sensitivity exposures, have highlighted wide differences in exporter firms’ performance across regions.  

After the Federal Reserve recently cut rates and indicated that further reductions were likely, the equity market rallied. But sell-offs in August and September signaled investor concerns about an economic slowdown. What are potential outcomes to consider? 

Companies with high climate-change risk scores have consistently outperformed, underscoring the value of integrating carbon data into equity analysis. Incorporating environmental opportunities into portfolios has been less straightforward, though the outlook is more optimistic.  

Carbon-credit users typically outperform non-users in disclosing and reducing their emissions, setting targets and investing in low-carbon technologies, while integrity in carbon markets is also improving — key takeaways from MSCI’s Climate Week NYC event.  

Amid a sharp asset-price decline and weakened occupier demand, billions of dollars of loans tied to the U.S. office market are coming due. We chart the lenders behind the maturing loans and estimate the volume of debt that has been extended. 

Location and granularity may be the new mantra in assessing climate-related physical risk, while private assets and AI have a growing role in the decarbonization — key takeaways from MSCI’s Climate Week NYC event on “Financial Frontiers: Climate Strategies and Transition Frameworks.”

The MSCI Climate Indexes fall into one of three categories — reduce fossil-fuel exposure, finance the transition and align with net-zero policies — designed to reflect investors’ broad range of climate-related preferences.  

It’s climate week in The Big Apple! And the perfect time to take a look at different investment approaches to a low-carbon transition. We talk through financial risks and opportunities for companies, transition funds, and how the things are playing out in bond markets.

Using statistics based on past flood events to estimate the likelihood of future flooding is increasingly outdated. Forward-looking climate-scenario analysis to accurately estimate current and future flood risk is becoming key. 

Distributions and holding periods in private markets remain key considerations for assets owners. We examine the trends and also summarize the performance of major asset classes in Q2 2024. 

Chronic heat is causing stress on workers and driving the need for adaptations to current working conditions. Using geospatial intelligence, we assess the potential impact of heat at the asset level for U.S. constituents of the MSCI ACWI Investable Market Index. 

Have users of carbon credits reduced emissions faster or slower than non-users? Our latest report contradicts the notion that companies have used carbon credits as an alternative to investing in climate mitigation activities within their businesses. 

Sustainable investing for sovereign bonds may come with a caveat: Green bonds tend to have longer duration profiles than non-labeled equivalents. What does it mean for fixed-income investors with a climate mandate?