Indian Equity Market Set to See Inflow of $3.6 Billion After US Federal Pension Fund Switches Index Methodology
A decision by a U.S. federal government pension fund to change its equity benchmark index to gain more international exposure is expected to trigger $28 billion in outflows from global equities, with India, however, expected to be the main beneficiary of the move. Analysts said Indian stocks could attract $3.6 billion in inflows as a result of the outflow.
The Federal Retirement Thrift Investment Board (FRTIB), one of the U.S. government's flagship pension funds with over $600 billion in assets under management, recently decided to change its benchmark index for investing in global stocks from the MSCI EAFE Index to the MSCI ACWI IMI ex USA, excluding China and excluding Hong Kong. Not just India, the U.S. government will also benefit economies around the world as the change is expected to shift $28 billion (Rs 230 crore) in equity investments globally.
Back on November 14, MSCI-Barra announced there will be 194 additions to and 284 deletions from the MSCI ACWI Investable Market Index (IMI).
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