Plan sponsors with funds tied to those benchmarks could see an impact on their holdings as well.
On Sunday, MSCI is expected to announced a change in the way companies are weighted in its indexes, basing it on the shares available for trading – or, the “free float” – rather than on a company’s total valuation, which can include shares that aren’t traded. MSCI indexes are used as benchmarks for some $4 trillion in investments worldwide, according to MSCI.
Companies with large stock positions held by governments, families or other companies will likely be the biggest losers in such a change, according to Bloomberg. Japan, where many companies own large portions of each other in cross shareholdings that aren’t available to the public, is expected to suffer a net outflow, while Great Britain and the US are expected to benefit.
The announcement will come at 12:15 p.m. Central European Time Sunday.