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MSCI decision has strongest impact on iShares

Blackrock iShares account for the bulk of AUM of ETFs that will be affected by MSCI's decision to include China A-shares in its emerging markets indices, according to Morningstar data.

Today’s MSCI announcement that it will add China’s A-shares to several of its indices has a small impact – an estimated $17bn is expected to flow into MSCI EM and World Index-tracking products. But the decision will have an outsized impact on iShares ETFs, many of which follow the affected indices, unlike Vanguard’s products, which tend to follow the FTSE indices.

Out of the global universe of more than 6000 ETFs, 62 products with $109bn in AUM will be affected by MSCI’s decision, according to Morningstar data as of 31 May.

The figure is divided into two parts. Around $88bn of assets are managed among 32 ETFs tracking the MSCI Emerging Markets Index and its IMI (Investable Market Indexes) version.

About $20bn is held in ETFs that track the other indices impacted by the inclusion. 

The A-share decision impacts these MSCI indices 

Index Sum of ETF AUM Number of ETFs
MSCI Emerging Markets 51.3bn 29
MSCI Emerging Markets IMI 37.3bn 3
MSCI ACWI 8.8bn 6
MSCI AC Asia ex Japan 5.3bn 5
MSCI China 3.1bn 7
MSCI Emerging Markets Asia 2.8bn 6
MSCI AC Asia Pac ex Japan 424m 4
Data: Morningstar, in US dollars, as of 31 May 2017

Globally, Blackrock iShares dwarfs all other firms in AUM in ETFs exposed to China through MSCI indices.

Top firms impacted

Blackrock iShares 90.8bn
Amundi 4.8bn
DB x-trackers 3.6bn
Lyxor 2.8bn
Lantern 2.4bn
State Street 1.7bn
UBS 923m
HSBC 522m
Data: Morningstar, in US dollars, as of 31 May 2017

By domicile

The biggest AUM amount is in products domiciled in the US and managed by iShares. Two of its US-listed products, the MSCI Emerging Markets ETF and Core Emerging Markets ETF, each with $31bn AUM, account for the bulk of the firm’s US-listed products.

In terms of Hong Kong-domiciled ETFs, iShares has $1.1bn in ETF AUM and Mirae Asset has $98m AUM.

Top ETF markets affected by MSCI’s decision

Domicile ETF AUM Number of ETFs
United States 76.8bn 18
Ireland 18.1bn 16
France 7.6bn 8
Luxembourg 4.3bn 7
Hong Kong 1.2bn 4
Data: Morningstar, in US dollars, as of 31 May 2017


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