In June, MSCI started to include shares listed on the Chinese mainland (“A Shares”) in its Emerging market EM indices.
The company has an astonishing $1,353 bn in a single index - the MSCI Emerging Markets Index. That is 1.3 trillion (1.3 million multiplied by a million) – a very large number. In fact if every dollar was one second, it would represent 31,000 years – when the sahara desert was wet and fertile and the stone age was the new sensation.
Previously MSCI had only included Chinese companies whose shares were listed outside China, in Hong Kong. Pure China will represent 15% of that index. “Foreign China” is more than 40%.
If you’re a fan of trackers, this move needs noting. If not then the exposure these ETF funds provide are alarming. Read this excellent analysis of ETFs here.