MSCI’s ACWI IMI ex US, EAFE IMI and Emerging Markets IMI Indices will serve as the basis for the international equity components of iShares’ Core Series of exchange-traded funds (ETFs).
The iShares Core Series, the launch of which was announced on 15 October 2012, is a suite of products offering a family of domestic and international equity and US fixed income ETFs. Included in the launch are three international equity ETFs: iShares Core MSCI Total International Stock ETF, iShares Core MSCI Emerging Markets ETF, and iShares Core MSCI EAFE ETF.
Baer Pettit, managing director and head of MSCI’s index business, says: “We are delighted that iShares has chosen MSCI indices as the basis for this exciting new series of ETFs. The licensing of these indices will enable iShares to further broaden its product offering beyond ETFs based on our standard family of indices. We look forward to continuing to work with iShares in the future.”
Mark Wiedman (pictured), managing director and global head of iShares, says: “All three iShares Core international equity ETFs track segments of the flagship MSCI ACWI Investable Market Index (IMI), providing investors access to some of the broadest exposure available in the global equity universe today. MSCI is the predominant choice of professional investors and we’re pleased to deepen our relationship with them through the introduction of these new products using their indexes to help deliver high quality portfolio construction to all investors small and large.”
iShares’ selection of MSCI further broadens the range of MSCI indices linked to iShares ETFs. Many of iShares’ existing ETFs, including such large ETFs as iShares MSCI Emerging Markets ETF and iShares MSCI EAFE ETF, track indices from MSCI’s standard family. The standard family of indices is comprised of global large and mid-cap equities, and a number of indices within the standard family, such as MSCI EAFE, MSCI Emerging Markets and MSCI Europe, are among the world’s mostly broadly followed by institutional investors. While MSCI’s licensing fees for use of its ACWI IMI indices as the basis of the Core Series ETFs are lower than its current blended average licensing fee with iShares, the terms of MSCI’s licenses with respect to existing ETFs were not amended.
The MSCI ACWI Investable Market Index (IMI) captures large, mid and small cap representation across 24 developed markets and 21 emerging markets countries. The index is comprehensive, targeting coverage of approximately 99 per cent of the global equity investment opportunity set, with a strong emphasis on liquidity, investability and replicability. MSCI indices are reviewed quarterly with the objective of reflecting changes in the underlying equity markets in a timely manner, while limiting undue index turnover.