Extends existing line-up of hedging and currency indices
MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support tools worldwide, announced today the launch of new daily hedged indices, as part of the MSCI Hedging and Currency Indices family. The MSCI Daily Hedged and MSCI Hedged Indices aim to represent the returns of an MSCI parent equity index with its currency risk hedged back to a single “home country” currency. The index methodology seeks to reduce the return effects of currency fluctuations in the parent index.
The MSCI Daily Hedged Indices hedge each foreign currency in the index back to the home currency by “selling” each foreign currency forward at the TN (tomorrow next) forward rate each day.
“Daily hedged indices are used strategically by investors who may want to gain exposure to foreign equity markets, but who also want to mitigate the risk of currency fluctuations,” said Diana Tidd, Managing Director and Head of the MSCI Index Business in the Americas.
The MSCI Daily Hedged Indices aim to track the parent index in local currency terms more closely than the MSCI Hedged Indices which are hedged on a monthly basis; however, they incur the expense of more frequent hedging.
MSCI Inc. is a leading provider of investment decision support tools to investors globally, including asset managers, banks, hedge funds and pension funds. MSCI products and services include indices, portfolio risk and performance analytics, and governance tools.
The company’s flagship product offerings are: the MSCI indices with close to USD 7 trillion estimated to be benchmarked to them on a worldwide basis1; Barra multi-asset class factor models, portfolio risk and performance analytics; RiskMetrics multi-asset class market and credit risk analytics; IPD real estate information, indices and analytics; MSCI ESG (environmental, social and governance) Research screening, analysis and ratings; ISS governance research and outsourced proxy voting and reporting services; and FEA valuation models and risk management software for the energy and commodities markets. MSCI is headquartered in New York, with research and commercial offices around the world.
1As of September 30, 2012, as published by eVestment, Lipper and Bloomberg on January 31, 2013