WORLDTECHMSCI drops Strategy from USA Index in November review
MSCI has confirmed the removal of Strategy from its USA Index, which requires portfolio changes from funds that track the benchmark. The company had opposed the index provider's rules before the decision was taken.
Removal confirmed for funds tracking the index
MSCI has confirmed that it is taking Strategy out of its USA Index, according to independent outlets that reported the decision. Funds that follow the benchmark must now make changes to their holdings to reflect the new composition.
The removal from MSCI's equity indexes also gives funds tracking those benchmarks a deadline, and it puts the company behind the shares to a financing test.
Company argued against exclusion
Strategy had argued that being excluded would damage its standing as a neutral provider, and it pushed back on MSCI's rules. The objection did not alter the index provider's decision.
The outcome followed a disagreement over how MSCI classifies companies whose operations are built around holding assets, a question that bears directly on firms with large digital asset holdings.
Open questions
- How will funds tracking the USA Index rebalance their holdings before the change takes effect?
- What effect will the exclusion have on Strategy's share price and financing?