MSCI Inc, a provider of critical decision support tools and services for the global investment community, announces the launch of five thematic indexes tracking the performance of long-term megatrends which are widely expected to impact society and the economy in the future.
The new thematic indexes are useful for investors focused on the rise of smart cities, the digital economy, future mobility, disruptive technology and millennials.
MSCI constructs these thematic indexes with scalable and flexible methodologies. The index methodology systematically identifies companies based on the linkage of their business lines and business description information with the theme being modelled. MSCI derives an economic relevance score to assess the strength of that link to select the final index constituents.
This launch adds to MSCI’s existing thematic index suite of four indexes focused on cyber-security, robotics, ageing societies and efficient energy.
Stephane Mattatia, head of index products EMEA and global thematic index products at MSCI, says, “It is widely acknowledged that there are a number of megatrends which will significantly impact the global economy and societies around the world, and we’re seeing increasing demand from investors seeking to align their investments to these long-term themes. This new suite of indexes provides them with tools they need to assess and measure these structural trends.”
The MSCI ACWI IMI Smart Cities Index is composed of companies that are positively exposed to the shift towards smart cities, including smart connectivity, smart infra, smart buildings and homes, smart safety and security, smart mobility, smart waste and water management.
The MSCI ACWI IMI Digital Economy Index is composed of companies that derive significant revenues from the digital economy value chain, including digital payments, robotics, cybersecurity, E-commerce, the sharing economy, social media and cloud computing.
The MSCI ACWI IMI Future Mobility Index is composed of companies that are positively exposed to increased investment in electro-chemical energy storage technologies, mining companies that produce metals used to manufacture batteries, autonomous vehicles and related technologies, electric vehicles, new transportation methods and shared mobility.
The MSCI ACWI IMI Disruptive Technologies Index is composed of companies commonly associated with or described as disruptive technology. These are broadly classified under the sub-theme 3D printing, the Internet of Things, cloud computing, fintech, digital payments, healthcare innovations, robotics, cybersecurity, clean energy and smart grids.
The MSCI ACWI IMI Millennials Index is composed of companies that are positively exposed to the spending power and preferences of the millennial generation. These companies encompass a broad range of categories including popular brands, health and fitness, travel and leisure, social media and entertainment, housing and home goods, financial services, food and dining and clothing and apparel.
The indexes have several potential applications for investors: as an investment policy benchmark to guide strategic asset allocation; to act as the underlying index for passive products, including ETFs and mutual funds; and as a benchmark to measure performance of asset managers.