Investor Challenged Proposed Changes to MSCI Global Indexes
Bill Miller formally opposed new index screening rules that could trigger the removal of certain companies.
Updated on Sept. 30, 2026 in Investing
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Investor Bill Miller submitted a formal response to MSCI challenging a new proposal to remove companies with high non-operating holdings from its global indexes. The proposal would introduce multiple quantitative screens to filter out firms that rely on external funding instead of active operations.
Why it matters
The change aims to exclude companies whose value is driven by passive assets rather than active business performance, potentially impacting the makeup of portfolios that track these benchmarks. MSCI aims to refine index eligibility by focusing on firms with consistent operating cash flow.
MSCI’s proposal includes a 50% operating asset threshold for the first test, followed by five additional secondary screens. If finalized, firms would need to fail these screens for two consecutive annual periods before facing removal from the index.
The players
Bill Miller
An investor who submitted a formal challenge regarding proposed index changes.
MSCI
A provider of global equity indexes that benchmarks performance for institutional and retail investors.
The details
Under the new criteria, MSCI would evaluate companies based on operating asset intensity, expenses, cash flow, fair-value intensity, and capital dependence. Firms failing the primary operating asset test must then pass these quantitative filters. A company only becomes ineligible if it triggers four of the five secondary screens for two consecutive annual periods.
Timeline
May 2026: MSCI performed simulations identifying potential deletions.
September 29, 2026: Bill Miller submitted a formal response to MSCI.
September 30, 2026: The MSCI consultation period closed.
October 16, 2026: MSCI is expected to announce a final decision.
November 2026: Proposed index review for potential implementation.
Money Landscape
This move follows a historical pattern of index providers refining eligibility requirements to better reflect operating performance. It sits within the broader cycle of MSCI Index Review updates designed to keep global benchmarks aligned with specific investment philosophies.
Investors holding funds that track MSCI global indexes should monitor the upcoming October decision, as confirmed deletions could lead to portfolio rebalancing. You may wish to consult a financial professional to understand how shifts in index composition might affect your specific holdings.
The takeaway
MSCI is evaluating whether to move forward with stricter criteria for companies relying on non-operating holdings. Investors should track the final decision in mid-October to see if their index-tracking funds will undergo changes in the November review cycle.
Further reading
For more background on how index adjustments affect market participants, visit the Investing section.
Live Poll
Should global stock indexes exclude companies that hold significant amounts of alternative treasury assets?
