The continued growth of ETF and passive investment products only has increased the relevance of the providers of the indices that these products track. To date, the creation of the communications services sector is the biggest sign of that, but more changes are potentially coming.

MSCI is considering proposals to reduce the weighting of companies that do not have equal voting rights. This would reduce the size in indices of a number of major technology stocks, such as Alphabet and Facebook, that have dual-class voting structures, as well as a number of European heavyweights, such as Porsche, Roche and Unilever. MSCI is also considering proposals that would reduce the weight of markets — particularly emerging markets — that have restriction on accessing the local market.

Indices seek to replicate the reality of the investment world around us as much as possible and are becoming ever more important today. The repercussions from all these changes may extend for longer, as investors become used to the new sectors and characteristics.

—By Ben Laidler, global equity strategist and head of research for Americas at HSBC