MSCI launches risk control index family

MSCI has launched a group of risk control indices to target specific levels of risk in seven regions.

The MSCI Risk Control Indices are intended to serve as benchmarks for managed volatility strategies, or as a basis for financial products such as exchange traded funds and structured products. The launch of the indices adds another set of strategy indices to the MSCI Risk Premia Indices family.

The MSCI Risk Control Indices will be calculated for seven regions: world, EAFE, Europe, emerging markets, EM50, the world excluding Japan, and the USA. Each index will be provided in three currencies and with four target volatilities: 10%, 12.5%, 15% and 17.5%, and the indices can also be customized to reflect client-specific requirements.

Theodore Niggli, managing director at MSCI said: “The various market downturns that have occurred over the past few years have prompted many of our clients to mitigate the tail risk of their equity investments. We believe that the MSCI Risk Control Indices are a useful tool for institutional investors looking for exposure to equity beta with a managed volatility and potentially lower tail risk.”

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