MSCI (MSCI) J.P. Morgan Ultimate Services Investor Conference 2024 summary

Market environment and client dynamics

• Gradual improvement in client dialogues, supported by strong equity markets and higher revenues for asset managers.

• Retention rates expected to rebound in Q4 after a dip in Q3, with ongoing elevated cancellations and longer sales cycles.

• Cancel pipeline is slightly above last year, tracked closely with some unpredictability in timing.

• Sustained equity market momentum boosts client confidence and expansionary behavior, though recent political shifts' impact is still unclear.

ESG, climate, and regulatory trends

• Two-thirds of ESG and climate segment revenue is generated outside the Americas, with Europe being more mature and Asia in early adoption.

• Financial materiality-based ESG tools are a differentiator, helping clients manage climate risks and regulatory requirements.

• No expectation for significant new U.S. ESG regulation in the near term, but tools remain mission-critical globally.

Asset flows and product trends

• Significant flows into money market and cash products due to higher yields, causing outflows from active equity strategies.

• Non-ETF passive business is larger than ETF, with $3.65 trillion AUM and stable fees, driven by demand for custom and non-market cap weighted products.

• Growth in custom index mandates and climate/factor overlays, with differentiated value in non-market cap weighted products.