Shares of MSCI (NYSE:
MSCI
), the already beleaguered index provider, plunged into the close
Monday on heavy volume and headlines from BlackRock (NYSE:
BLK
) may be behind MSCI's late-session slide.
Earlier this afternoon, The Wall Street Journal sent headlines
over the wires detailing BlackRock's plans to slash fees on some
of its ETFs
and the company's intentions to introduce new
ETFs to compete with Vanguard
.
BlackRock's iShares unit is the world's largest ETF issuer and
Vanguard is the third-largest in the U.S. Traders may be
speculating that BlackRock's plans to issue new ETFs aimed at
retaking market share from Vanguard could include self-indexing
plans. iShares previously filed self-indexing plans
but has yet to issue an ETF based on one of its
own indexes
.
Self-indexing is the process by which an ETF provider such as
iShares or Vanguard uses its own proprietary indexes rather than
contracting out to a company such as MSCI or FTSE Group of the
U.K. MSCI experienced a record-one day decline earlier this month
when Vanguard announced it was dropping MSCI index on 22 of its
ETFs
including the popular Vanguard MSCI Emerging
Markets ETF
(NYSE:
VWO
).
"MSCI is the gold standard of global and international equity
indexes - the near-universal choice of professional investors. We
plan to deepen our partnership with MSCI to help deliver the
highest quality products and portfolio construction to our
clients," said Mark Wiedman, global head of iShares, at the time
in an email to the media.
MSCI and iShares currently enjoy an intimate relationship as
the ETF sponsor uses MSCI indexes for all but one of its ETFs
tracking individual developed markets. MSCI is also the index
provider for the bulk of the iShares emeging markets suite,
including both country-specific fund such as the iShares MSCI
Brazil Index Fund (NYSE:
EWZ
), and multi-country funds such as the iShares MSCI Emerging
Markets Index Fund (NYSE:
EEM
).
Shares of MSCI, a former unit of Morgan Stanley (NYSE:
MS
), closed lower by almost 1.4 percent today on volume that was
nearly double the daily average.
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