MSCI launches new core infra index (0)

The index provider created the new benchmark in response to growing interest in the segment and an "evolving shift" in the way investors view real assets.

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Investors wishing to invest in infrastructure but hesitant to do so because of a lack of performance measures will now have a new tool at their disposal following the launch of the MSCI World Core Infrastructure Index, which will represent the performance of companies active in the core infrastructure space in developed markets.

The launch of the new performance-measuring tool was the result of a recent client consultation that underscored the need for “a more granular understanding of the performance of the infrastructure sector,” MSCI said in a statement.

The index comprises securities that belong to eligible sub-industries from the Global Industry Classification Standard (GICS). The sub-industries selected include utilities (comprising electric, gas and water utilities as well as oil and gas storage and transportation) and infrastructure (encompassing railroads, airport services, highways and rail tracks, marine ports and services, and specialised real estate investment trust).

According to MSCI, the weight of each sub-industry is capped at 15 percent to ensure greater diversification, while the weight of each security is capped at 5 percent to reduce concentration.

“The launch of the MSCI World Core Infrastructure Index is in response to growing interest in this asset class and an evolving shift in the way investors view real assets,” said Diana Tidd, managing director and head of the MSCI Index Business in the Americas. “Real assets, such as real estate and infrastructure, are increasingly being viewed by investors as a foundational building block of a modern investment portfolio, rather than an alternative.”

The move follows the launch last November by Investment Property Databank (IPD), a provider of commercial real estate indexes and analytics MSCI acquired in 2012, of a new benchmark designed to assess investment performance in the global, unlisted infrastructure market.

The ambition of the IPD Global Infrastructure Direct Asset Index is to capture at least 60 percent of the market, both globally and within a number of segments the company intends to explore more closely – an objective IPD expects to have made significant progress towards when its next set of results are released by end of Q1 2015.