Interesting idea. I'd have no objection to inclusion of private equity in total market funds if private equity is included at market weight---with the stale valuation problem eliminated---and for low enough cost. The first thing to note about the MSCI All Country Public & Private equity index is that having an index doesn't mean there has to ever be an investable fund based on that index. I doubt whether there will be an investable fund any time soon. It's always been unclear how an open ended mutual fund or ETF can incorporate private equity. How do they buy private, much less how do they sell private, in response to cash flows into and out of the fund.In the same vein, why should one not include private equity in a total world index? After all, PE has "hijacked" small caps quite a bit...
MSCI launches index integrating public markets and private equity
The issue specific to this MSCI index is how did they arrive at a static 15% allocation to private. The press blurb says, "The index is reviewed and rebalanced quarterly ..., and the weighting factors are reset to the target allocation." A static weighting instead of a capitalization weighting makes no sense to bolt onto what's otherwise a capitalization weighted All Country index. I suspect they do this kludge because their data does not in fact have the granularity to permit capitalization weighting of private companies.
And, of course, until there is an investable vehicle, the cost of the public plus private global index fund over and above the public only is unknown.
And interesting, but flawed idea, for which it's probably just as well that we can't invest in it now.
Statistics: Posted by asset_chaos — Sat Dec 13, 2025 2:18 am — Replies 17 — Views 2238