MSCI Is Capitalizing on Growth in Passive Investing and ESG Trends

MSCI (NYSE: MSCI) is a financial data provider and software company most known for creating and managing the MSCI (Morgan Stanley Capital International) stock market indexes. It also provides investment analytics for portfolio managers and research on environmental, social, and governance (ESG) issues. These businesses are all growing and exposed to long-term tailwinds and present investors with an interesting opportunity to bet on a company with strong long-term prospects.

MSCI has its hands in a couple of distinct businesses that generate revenue in different ways. It's most known for its index business, which is also its largest business segment by sales. An index is a grouping of financial securities that are put together by a set of rules. For example, the S&P 500 index is a specialized collection of the 500 largest companies in the United States by market capitalization.

MSCI maintains over 215,500 indexes of various types for its clients. Some of these indexes are licensed to asset management companies which use them to create investment products. If an asset manager launches a product based on an MSCI-constructed index, the asset manager will pay MSCI a cut of the fees it collects from investors. Other clients contract MSCI to make private indexes and pay a recurring subscription fee for the service.

Source Fool.com