MSCI has launched a solution to help institutional investors navigate crowded markets by providing high quality, timely information and data to inform their decision making in achieving their investment objectives.
According to the provider, ‘Crowding Model’ helps identify crowded, neutral or uncrowded scenarios across individual securities, factors and hedge fund holdings.
It said this enabled investors to assess their own exposure to crowdedness and gain insight as to how the rest of the market is positioned.
This was at a time where market sentiment could fluctuate widely, possibly causing concentrations in investment managers’ holdings or trading styles.
The provider said the launch of the new service reflected increasing demand for customised, targeted, and daily investment analytics.
According to MSCI, its models infer the relative degree of crowdedness by examining a dynamic set of metrics incorporating holdings, pricing and return-based information that are sensitive to large amounts of capital following the same strategies.
Jorge Mina, head of analytics at MSCI, said the Crowding Model aims to provide investors for the first time the opportunity to quickly assess crowding activity and risk.
“This solution underlines our systematic and process-oriented approach in providing information at the right time to help investors gain transparency and make better investment decisions,” he added.