Kiwis risk missing out with limited benchmarks

The latest benchmarking paper from Russell, ‘What’s (not) in your benchmark?’ looks at four popular global equity indices and index oriented funds used by Kiwi investors, and says many local managers do not have the capability to access emerging markets efficiently.

It goes on to assert that clients of such managers are limited to developed markets only offerings, or access via inefficient feeder fund structures, or potentially tax-inefficient offshore funds.

The investable global equity market includes more than 70 countries and around 10,000 stocks exceeding NZ$100 trillion in capital. Countries are split into developed, emerging and frontier markets.

MSCI provides indices for all three, with the MSCI All Country World Index (ACWI) and the MSCI Frontier Markets Investable Market Index combined capturing about 99% of the global equity opportunity set.