MSCI (NYSE: MXB), a leading provider of investment decision support tools worldwide, announced today the launch of the MSCI FX Hedge Indices, designed to help institutional investors decompose and measure the impact of hedging the currency exposure of MSCI equity indices.
Based on the MSCI Global Investable Market Indices (GIMI), the MSCI FX Hedge Indices are designed to reflect the investment process of hedging the currency exposure of a regional MSCI index using monthly FX forward contracts. The MSCI FX Hedge Indices seek to simplify the currency hedging investment process for institutional investors by creating standardized currency indices that correspond to the underlying MSCI benchmarks.
"Currency risk is inherent to the global equity markets, and many investors around the world are looking for innovative tools to help them identify and manage this risk more effectively," said Theodore Niggli, Managing Director and Head of MSCI Indices. "For asset managers and pension plans using our widely followed indices such as MSCI ACWI, MSCI EAFE and MSCI Emerging Markets, we now offer corresponding MSCI FX Hedge Indices enabling them to directly analyze and benchmark the process of currency hedges."
In addition to serving the portfolio construction process, the MSCI FX Hedge Indices may also be licensed as the basis of index-linked investment vehicles such as OTC options or swaps, structured products and ETFs.
The MSCI FX Hedge Indices can be calculated for any regional or composite index within the MSCI Global Investable Markets Index family. The following flagship indices are available in USD and EUR at launch:
- MSCI All Country World (ACWI) FX Hedge Index
- MSCI World FX Hedge Index
- MSCI EAFE FX Hedge Index
- MSCI Emerging Markets FX Hedge Index
- MSCI Europe FX Hedge Index
- MSCI Pacific FX Hedge Index
The indices are available on request from MSCI.