If You Invested $1000 in MSCI a Decade Ago, This is How Much It'd Be Worth Now
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in MSCI (MSCI) ten years ago? It may not have been easy to hold on to MSCI for all that time, but if you did, how much would your investment be worth today?
MSCI's Business In-Depth
With that in mind, let's take a look at MSCI's main business drivers.
MSCI Inc. provides investment decision support tools, including indexes; portfolio construction and risk management products and services; Environmental, Social and Governance (ESG) research and ratings; and real estate research, reporting and benchmarking offerings.
MSCI reported operating revenues of $2.53 billion in 2023. The company operates under four segments — Index (57.4% of operating revenues), Analytics (24.4%), ESG and Climate (11.4%) and All other- Private Assets (6.9%). During the year ended Dec 31, 2023, MSCI renamed The Burgiss Group, LLC operating segment to Private Capital Solutions.
Index segment includes MSCI Global Equity Indexes, MSCI Custom Indexes, MSCI Factor Indexes, MSCI ESG Indexes, MSCI Real Assets Indexes and Thematic Indexes. Global Industry Classification Standard (GICS) and GICS Direct were developed and are maintained jointly by MSCI and Standard & Poor’s Financial Services.
Analytics segment includes Equity Factor Models, Fixed Income Factor Models, Multi-Asset Class Factor Models, Multi-Asset Class Risk Analytics and Performance Analytics.
MSCI’s major application offerings include RiskMetrics RiskManager, BarraOne, Barra Portfolio Manager, WealthBench & CreditManager, and MSCI Analytics Platform. Through the Analytics segment, MSCI also provides Managed Services, HedgePlatform and InvestorForce solutions.
MSCI’s ESG Research analyzes more than 10,000 entities worldwide. Offerings include MSCI ESG Ratings and MSCI ESG Business Involvement Screening Research.
MSCI generates revenues primarily through subscription fees, which, in most of the cases, is paid in advance. Clients using the company’s indexes as the basis for index-linked investment products (ETFs) or as the basis for passively managed funds also pay license fee, typically in arrears, based on the assets under management (“AUM”) in their investment products.
The company’s clientele includes pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices, insurance companies, mutual funds, hedge funds, ETFs, private wealth, private banks, REITs, broker-dealers, exchanges, custodians, trust companies and wealth managers.
As of Mar 31, 2024, MSCI served more than 7,000 clients across 95 countries worldwide.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in MSCI ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in October 2014 would be worth $12,409.93, or a gain of 1,140.99%, as of October 7, 2024, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 192.24% and the price of gold went up 110.55% over the same time frame.
Going forward, analysts are expecting more upside for MSCI.
MSCI reported strong second-quarter results, with revenues and earnings increasing year over year. Top-line growth was driven by strong demand for custom and factor index modules, recurring revenue business models and the growing adoption of its ESG and Climate solutions in the investment process. MSCI’s expanding portfolio of real asset solutions was also noteworthy. The company’s strategic partnerships, including the one with Moody’s, expanded its ESG and sustainability coverage, while its new MSCI AI Portfolio Insights tool and recent acquisitions, such as Foxberry, bolstered its capabilities in custom indexing and AI-driven analytics. However, a tighter spending environment and longer sales cycles due to challenging macroeconomic conditions have been a headwind. Shares has underperformed the industry in the year-to-date period.
The stock is up 5.34% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2024. The consensus estimate has moved up as well.
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