30 Jun 2021

Calculation Methodology Change for the MSCI/AREF UK Quarterly Property Fund Index

MSCI have announced the conclusion from its recent consultation with the UK real estate investment community on the incorporation of a time-weighted return (TWR) methodology (reflecting daily-weighted external cash flows at fund level) for use in the MSCI/AREF UK Quarterly Property Fund Index.

Based on the consultation feedback, it has been concluded that for the MSCI/AREF UK Quarterly Property Fund Index no changes will be made to the current index calculation methodology and it will continue to be based on the unitised computation methodology with adjustments for cross-holdings.

For more information please read the announcement.

Changes to the inclusion criteria of MSCI/AREF UK Quarterly Property Fund Index

Also, MSCI announced the conclusion from its recent consultation with the UK real estate investment community on the changes to the inclusion criteria for the MSCI/AREF UK Quarterly Property Fund Index (UK PFI). The consultation decision is aimed at having inclusion rules that are simple, consistent and rules-based.

Following the positive feedback received from the market participants MSCI will implement the below enhancements on a moving forward basis starting Q1 2022 results reporting with no restatement to index history:

  1. Changes to the certain Index inclusion rules
  2. Changes to Sub-index inclusion rules
  3. Introduce quarterly review and observation period for certain criteria to assess eligibility of index constituents
  4. In order to reflect the changes to sub-index rules, the current sub-indexes are renamed as outlined in the index announcement.

For further details on consultation decision on changes to the inclusion criteria please read the announcement.

Author

Jacqui Bungay

Jacqui Bungay

AREF Policy Secretariat , AREF

Jacqui provides policy guidance and secretariat services to the AREF Board and AREF Management Committee as well as the following AREF Committees: Corporate Governance, ESG & Impact Investing, Investor, Public Affairs, Research and Information and Retails Funds. In addition, Jacqui monitors members’ compliance with AREF’s Code of Practice. 

Jacqui joined AREF in 2014 after working for over 25 years in fund compliance, client relationships and administration at Natwest Trustee & Depositary Services.