MSCI is launching MSCI Multi-Factor Indexes in order to provide institutional investors a basis for passively implementing index-linked multi-factor strategies transparently and cost-effectively.
The indexes are available in standard combinations provided by MSCI or as a custom mix created by the client.
Both approaches can be based on underlying flagship indexes such as MSCI EAFE, MSCI ACWI, MSCI World and MSCI Emerging Markets.
“Combining factor indexes makes sense from a diversification standpoint,” says Remy Briand, head of MSCI Index Research. “Factor returns have historically been quite cyclical, with some factors underperforming the market cap-weighted benchmark for several years in a row. Combining factors has historically yielded a smoother ride over time.”
Related article: