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Opinion

Buyer beware -- MSCI is not a quality guarantee

Bending of index rules in hope of Chinese reforms is bound to lead to disappointment

| China
MSCI opted to compromise on standards to go with investors who wanted to be in China. (Photo by Akira Kodaka)

Could MSCI, the financial market index company, live to regret its loudly trumpeted move to include Chinese domestic shares in its indexes starting June 1?

The momentous step will compel fund managers tracking or benchmarking against MSCI's global emerging markets index and others to buy Chinese domestic shares for the first time. An estimated $1.7 trillion is invested in funds linked to the MSCI Emerging Markets Index alone.

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