Industry Updates

MSCI's Q3 financial report: Previous market depreciation rectified

George Geddes

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MSCI today released its financial results for the third quarter of 2018. A highlight from the report is AUM in ETFs associated with MSCI indexes is up $91.2bn (13.5 percent) to $765.5bn from Q3 2017. However this increase is significantly lower that the $192.9bn increase in AUM over the Q3 2017 period alone. Could this suggest the ETF market is starting to plateau?

Revenue for Q3 is $357.9m which is up $35.8m compared to the same period 12 months ago. A driver for this 11.1 per cent increase is a $9.1m rise in asset-based fees which includes ETFs and passive funds. To be more specific, $5m in revenue came from ETFs linked to MSCI indexes which is a result from the average ETFs AUM rising by 15.5 per cent.

AUM in ETFs Linked to MSCI Indexes:

Q3 2018Q2 2018Q3 2017Beginning Period AUM in ETFs linked to MSCI indexes$744.7bn$764.9bn$481.4bnMarket Appreciation/(Depreciation)$15.6bn$(19.4)bn$91.6bnCash Inflows$5.2bn$(0.8)bn$101.3bnPeriod-End AUM in ETFs linked to MSCI indexes$765.5bn$744.7bn$674.3bn

The table shows how the market depreciated by $19.4bn in Q2 of this year. However the loses have been rectified following Q3's performance. An increase in market value and cashflow saw AUM rise by $21.8bn but resulted in the AUM being only $0.6bn higher than what it was six-months ago. The inflow of assets has been steadily decreasing every quarter since Q3 2017.


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