India’s weight in MSCI Global Standard index hits record high

India’s weight in MSCI’s Global Standard index, which tracks emerging market stocks, has reached a new record high, enhancing the prospects for increased inflows into its equity markets. The weightage for India will increase to 19% from 18.2%, while China’s will decrease to 25% from 25.4%. These changes, announced on Wednesday, will take effect on May 31. According to Abhilash Pagaria, an analyst at Nuvama Alternative and Quantitative Research, the May review is expected to result in approximately $2 billion of inflows into India.

Continued investments from domestic institutional investors and consistent participation by foreign investors could potentially boost India’s weightage in the MSCI Global Standard index to over 20% by the second half of 2024, Pagaria noted. The May adjustment has also resulted in India’s stock count in the MSCI Global Standard index reaching 149, the highest ever for the country.

Analysts attribute India’s rising prominence in emerging markets to the strong performance of its equities, particularly in the mid-cap segment, contrasted with the relative underperformance of other emerging markets, especially China.

Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.

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