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Baron Funds Comments on MSCI

February 06, 2013 | About:
Holly LaFon

Shares of MSCI, Inc. (MSCI), which provides equity market indexes and investment decision support tools, declined after Vanguard, a large client, unexpectedly stopped using some of MSCI's indexes as benchmarks for Vanguard's exchange traded funds (ETFs). Instead, Vanguard switched its benchmarks to a competitor's product offering.Vanguard's decision negatively impacted MSCI's highest-margin revenue stream, and it caused us to question whether other large clients might follow suit, or press for a significant reduction in their own fee structures. As a result, we chose to exit our investment in the company.

From Baron Funds' fourth quarter letter.


Rating: 1.0/5 (1 vote)

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