reels from Vanguard
] defection, Larry Fink
may win better indexing pricing for BlackRock
] ETFs. And it all comes a month after a key executive sold shares in the New York City-based index provider.
On Tuesday the world's largest mutual fund shop revealed
plans to drop MSCI as index provider from $537 billion in mutual fund and ETF assets, and separately MSCI disclosed
a Wells Notice from the SEC. MSCI's shares fell from 23 percent from Monday to close at $27.34 each yesterday. Now Aaron Pressman of Reuters offers
the latest follow up on the implications of Vanguard's move.
While Vanguard was MSCI's second biggest indexing client, BlackRock is the indexer's biggest. And last month Fink told
investors that iShares was "going to have reduce fees and reduce margins" on some ETFs.
After the Vanguard announcement, global iShares head Mark Wiedman stood by
MSCI, calling the index provider "the gold standard of global and international equity indexes." Yet now Reuters
reports that the world's largest asset manager "declined to comment on pricing issues."
The wire service reports that investors fear, and analysts expect, New York City-based BlackRock "would get fee concessions but would not switch index providers." Reuters
talked to analysts from Credit Suisse, Raymond James and others. The wire service said that "MSCI's crown jewel has always been indexing."
On Tuesday MSCI CEO Henry Fernandez told analysts
that ETF assets "may not be as stick as we all thought" and that ETF providers can jump from one index to another in "relatively short periods of time."
also notes that Vanguard's move also comes one month after MSCI's indexing chief, Baer Pettitt sold
shares in MSCI for the first time since 2010. According to a September 10 filing
with the SEC, on September 7 Pettitt sold 72,276 shares of MSCI common stock for $36.61 per share, for a grand total of nearly $2.65 million.
To find out more about why Vanguard made the switch, watch chief investment officer Gus Sauter's explanation. And click here
for analysis of what the switch means for investors.
Neil Anderson, Managing Editor
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