31st October 2019

North America

New megatrend indices from MSCI

Morgan Stanley Capital International (MSCI) has launched five new megatrend indices tracking the rise of smart cities, the digital economy, future mobility, disruptive technology and millennials. These are the trends expected to impact and shape the economy and global society of the future.

This new suite complement the existing indices, covering cyber-security, robotics, ageing societies, and efficient energy. MSCI has identified these new topics as megatrends that will significantly impact the global economy and is acting in response to increasing demand from investors seeking to align their investments with these long-term themes.

The methodology identifies companies based on the links between their business lines and business description information and the theme being modelled. MSCI then calculates an economic relevance score to assess the strength of that link to select the final index constituents.

The definitions of the companies the indices track are as follows:

The MSCI ACWI IMI Smart Cities Index

Companies that are positively exposed to the shift towards smart cities, including smart connectivity, smart infra, smart buildings and homes, smart safety and security, smart mobility, smart waste and water management

The MSCI ACWI IMI Digital Economy Index

Companies that derive significant revenues from the digital economy value chain, including digital payments, robotics, cybersecurity, E-commerce, the sharing economy, social media and cloud computing.

The MSCI ACWI IMI Future Mobility Index

Companies that are positively exposed to increased investment in electro-chemical energy storage technologies, mining companies that produce metals used to manufacture batteries, autonomous vehicles and related technologies, electric vehicles, new transportation methods and shared mobility.

The MSCI ACWI IMI Disruptive Technologies Index

Companies commonly associated with or described as “disruptive technology”. These are broadly classified under the sub-theme 3D printing, the Internet of Things, cloud computing, fintech, digital payments, healthcare innovations, robotics, cybersecurity, clean energy and smart grids.

The MSCI ACWI IMI Millennials Index

Companies that are positively exposed to the spending power and preferences of the “millennial” generation. These companies encompass a broad range of categories including popular brands, health and fitness, travel and leisure, social media and entertainment, housing and home good.

MSCI has stated that the indices are intended to help investors by acting as an investment policy benchmark to guide strategic asset allocation, as well as a benchmark to measure an asset manager’s performance.