MSCI Launches Crowding Model Solution to Provide Institutional Investors With Daily Financial Traffic Data
June 29 2021 - 9:00AM
Business Wire
The new solution helps active managers analyze
their investments compared to the industry as a whole and make
better informed, timely decisions about potentially crowded or
uncrowded trades
MSCI Inc. (NYSE: MSCI), a leading provider of critical decision
support tools and services for the global investment community,
today launched the MSCI Crowding Model solution to help
institutional investors navigate crowded markets by providing high
quality, timely information and data to inform their decision
making in achieving their investment objectives.
The MSCI Crowding Model is built into an easy-to-use dashboard
and helps identify crowded, neutral or uncrowded scenarios across
individual securities, factors and hedge fund holdings. This
enables investors to assess their own exposure to crowdedness and
gain insight as to how the rest of the market is positioned.
The solution comes at a time where market sentiment can
fluctuate wildly, possibly causing concentrations in investment
managers’ holdings or trading styles. This can lead to higher
volatility, diminishing returns, and potential liquidity and
drawdown risks for investors. MSCI’s models are designed to enable
investors to identify potential bubbles and assess:
- Security crowding: MSCI Security Crowding measures the
degree to which a stock has been chased by investors.
- Factor crowding: The MSCI Factor Crowding Model allows
investors to examine Factor Crowding over time using multiple
dimensions that provide further insight into risk and return
drivers.
- Hedge fund crowding: Measures hedge fund positioning and
potential crowding around stocks, leveraging MSCI proprietary data
sources providing transparency, global coverage and more frequent
datasets
The launch of this service reflects the increasing demand for
customized, targeted, and daily investment analytics. MSCI models
infer the relative degree of crowdedness by examining a dynamic set
of metrics incorporating holdings, pricing and return-based
information that are sensitive to large amounts of capital
following the same strategies.
“Expanding and evolving our analytical capabilities and
offerings is a priority for MSCI as we continue our mission to be
at the forefront of innovation. The launch of the Crowding Model
solution is a testament to this as it aims to provide investors for
the first time the opportunity to quickly assess crowding activity
and risk,” said Jorge Mina, Head of Analytics at MSCI. “This
solution underlines our systematic and process-oriented approach in
providing information at the right time to help investors gain
transparency and make better investment decisions. Our Crowding
solutions serve as a navigator for an investment journey that
provides quality data and information to enable investors to
achieve their objectives.”
About MSCI Inc.
MSCI is a leading provider of critical decision support tools
and services for the global investment community. With over 50
years of expertise in research, data, and technology, we power
better investment decisions by enabling clients to understand and
analyze key drivers of risk and return and confidently build more
effective portfolios. We create industry-leading research-enhanced
solutions that clients use to gain insight into and improve
transparency across the investment process.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements relate to future events or
performance and involve risks that may cause actual results or
performance differ materially and you should not place undue
reliance on them. Risks that could affect results or performance
are in MSCI’s Annual Report on Form 10-K for the most recent fiscal
year ended on December 31 that is filed with the SEC. MSCI does not
undertake to update any forward-looking statements. No information
herein constitutes investment advice or should be relied on as
such. MSCI grants no right or license to use its products or
services without an appropriate license. MSCI MAKES NO EXPRESS OR
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR OTHERWISE WITH RESPECT TO THE INFORMATION HEREIN AND
DISCLAIMS ALL LIABILITY TO THE MAXIMUM EXTENT PERMITTED BY LAW.
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