MSCI to cap single issuer at 25% in US value index on interim basis

MSCI

21/07/2026 23:09

    July 21 (Reuters) - Global index provider MSCI MSCI.N said on Tuesday it will temporarily cap the weight of any single issuer in its MSCI USA Enhanced Value Index at 25% to address potential concentration risks.
The exceptional issuer cap, to be reviewed monthly, will take effect from September 1. 
The move comes as a rally in a handful of U.S. mega-cap stocks has increased concentration in equity indexes, raising concerns over investors' exposure to a small number of companies.
MSCI's stock market indices serve as benchmarks for ‌trillions of dollars in assets held by investment ​funds, pension plans, and asset managers to measure performance and guide investment decisions.
Under the rule, if the combined weight of securities from a single issuer exceeds 25% on a given day, MSCI will reduce that issuer's weight to 20% and redistribute the excess weight proportionately among the remaining issuers in the index. 
MSCI said it is reviewing concentration levels across its Enhanced Value indexes and will soon launch a public consultation with methodology enhancement proposals to address the issue.

 (Reporting by Prakhar Srivastava in Bengaluru; Editing by Shailesh Kuber)
 ((Prakhar.srivastava2@thomsonreuters.com;))