MSCI - Corporate quality meets growth

$MSCI (-2.02%)

MSCI is a leading provider of equity indices (e.g. known as the creator of MSCI World), risk management tools and ESG data solutions used by fund providers, asset managers and institutional investors worldwide.

MSCI generates the majority of its revenue (58%) from index licenses - i.e. for clients using MSCI indices in their investment products such as ETFs, funds or derivatives. This income is mainly based on fixed, recurring license fees and is supplemented by volume-based fees: the more capital is managed via an MSCI product, the higher the fee. In total, around 97 % of revenues are recurring - This ensures a high degree of predictability and makes the business model particularly crisis-resistant.

Together with S&P Global $SPGI (-2.36%) and FTSE Russell, MSCI dominates the market for equity indices - these three companies alone account for >70% of the market.

Put simply, MSCI will grow as long as the following points are true:

• Clients choose MSCI as their index provider (there are only the three major providers mentioned above to choose from)
• Customers' investment products based on an MSCI index receive an inflow of funds (e.g. due to the increasing trend towards passive investing via ETFs)
• Long-term rising stock markets

If you are interested, I can go into more detail about MSCI another time. Today I would like to illustrate the powerful mechanics of quality and growth using MSCI as an example.

Criterion 1: Company quality

Here are some points that make MSCI a quality company:

• Dominant market position in the index business: MSCI is one of the leading providers of equity indices worldwide and has established itself as the market standard with benchmarks such as the MSCI World or MSCI Emerging Markets. Many institutional investors and ETF providers use MSCI indices as a reference, which leads to strong customer loyalty and high switching costs.
• Pricing power: Thanks to the strong market position and deep integration of its products with clients, MSCI can regularly enforce price adjustments without risking high client churn. Customers are often heavily dependent on the indices and analysis systems.
• Recurring, predictable revenues: Much of the revenue is recurring and based on long-term license agreements or volume-based fees, such as depending on clients' assets under management (AUM). This means that revenues are very stable and easy to forecast - even in fluctuating market phases.
• High scalability: MSCI distributes largely digital and data-driven products, which means that new clients can be served with little additional effort. This leads to attractive economies of scale and rising margins with growing sales.
• Diversification of revenue sources: In addition to the index business, MSCI generates further revenue from areas such as ESG data, climate risk models, portfolio analysis and real estate valuation. This diversification makes the company less dependent on individual segments or short-term market trends.
• High management quality: The management pursues a long-term strategy with a focus on sustainable growth, efficiency and innovation. A high degree of discipline and clarity is evident in communication and implementation.
• Capital allocation: MSCI makes targeted investments in high-margin growth themes, makes complementary acquisitions and uses excess capital for sensible share buybacks. Capital allocation is focused, shareholder-friendly and growth-oriented.

Criterion 2: Growth

MSCI is growing steadily, albeit not explosively: since 2015, the company's turnover by an average of 11.5 % per year (see chart below).

Over the same period, the company has increased its net profits faster (19.5% per year) than sales - a classic sign of a high-quality, scalable company (see chart below).

Main reasons: Increased sales hardly lead to additional costs, better operational efficiency with increasing size, disciplined cost control and regular price increases.

MSCI was able to convert these profits very efficiently into free cash flow into free cash flow. Since 2015, net profit has increased by an average of 19.5% per year - free cash flow by as much as 20.2% per year (see chart below).

Free cash flow is the money that actually remains in the company after all expenses - i.e. what can be used, for example, to repay bank debts, buy back shares, pay dividends or take over other companies.

MSCI therefore not only manages to operate profitably, but also to convert a very high proportion of these profits into real money - a sign of:

• high capital efficiency
• a lightweight, digital business model with low capital expenditure
• and strong financial control of the company

Even more important than free cash flow, however, is free cash flow per share increased even more than free cash flow: by an average of 24.7% per year (see chart below).

The free cash flow per share shows how much real money flows to each individual shareholder per year. The fact that this figure is growing even faster than the total cash flow is due to the fact that MSCI has simultaneously reduced the number of outstanding shares due to its high profitability - through regular share buybacks (see chart below).

This is particularly attractive for investors: Even if you don't buy any additional shares, your stake in the company grows automatically because there are fewer shares of the company. This shows that MSCI not only works efficiently in operational terms, but also deploys its capital in a disciplined and shareholder-friendly manner.

The share price of a company follows the free cash flow per share over the long term. MSCI is no different: as mentioned, free cash flow per share has risen by an average of 24.7% per year since 2015, while the share price of MSCI increased by 25.0% per year over the same period (see chart below).

As the development of the free cash flow per share and the share price are almost congruent, this implies that the valuation of the company has increased only insignificantly. This can be clearly seen from the fact that the ratio between the share price and free cash flow (P/FCF) has risen only minimally between the end of 2015 and today (see chart below).

In other words: the rise in MSCI's share price is predominantly due to more sales, higher profits, higher cash flow and share buybacks, and not due to a rising valuation - which is positive. In fact, if investors give the company a higher valuation for the free cash flow per share that the company generates, then this actually offers potential for a higher share price.

Over the long term, MSCI's strong operating performance has clearly outperformed an index such as the S&P 500 ("SPY") clearly outperformed (see chart below).

In the last 5 years, however, the S&P 500 ("SPY") the nose ahead (see chart below).

On the one hand, this speaks for the the outstanding quality of the S&P 500 as well as for a potential for MSCI to catch up - provided that the company continues its successful operating performance in terms of sales, earnings and cash flow.

Do you have MSCI in your portfolio? Are you thinking about buying the stock?

As already posted privately, at least this part is also public. Did some shopping today:

$CAT (-3.82%)

$MSCI (-2.02%)

$6501 (-4.53%)

$NDAQ (-3.09%)

$AVGO (-3.09%)

$WM (-0.91%)

$NOVO B (-3.33%)

In the last few days, there are apparently signs that the free fall is flattening out. We often see an area that is being approached again and is holding. So for me it was now time to initiate a new wave of buying :)

but: will it really turn now? We don't know... and who knows if the man on the other side of the Atlantic won't come up with something new

Airbnb $ABNB (-4.7%)

Amazon $AMZN (-4.95%)

Axon $AXON (-4.08%)

Cadence $CDNS (-3.26%)

Constellation Software $CSU (-2.07%)

Costco $COST (-1.92%)

Crowdstrike $CRWD (-3.55%)

Fair Isaac $FICO (-2.9%)

Ferrari $RACE (+0.94%)

Hermes $RMS (-1.9%)

Hims & Hers $HIMS (-9.32%)

Intuit $INTU (-3.84%)

Intuitive Surgical $ISRG (-4.87%)

Mastercard $MA (-3.43%)

Microsoft $MSFT (-3.93%)

Moody's $MCO (-0%)

MSCI $MSCI (-2.02%)

Palantir $PLTR (-5.48%)

Robinhood $HOOD (-6.43%)

Roblox $RBLX

Shopify $SHOP (-5.82%)

Tesla $TSLA (-5.06%)

The Trade Desk $TTD (-3.73%)

Transdigm $TDG (-1.15%)

Select a maximum of 8-10 positions from this list that have the best risk/reward ratio and are reasonably valued. Then there is a good chance of outperforming the S&P 500.

Your opinion?

Nvidia $NVDA (-2.82%)

Novo Nordisk $NOVO B (-3.33%)

Microsoft $MSFT (-3.93%)

ASML $ASML (-2.28%)

Intuit $INTU (-3.84%)

Airbnb $ABNB (-4.7%)

Amazon $AMZN (-4.95%)

MSCI $MSCI (-2.02%)

S&P Global $SPGI (-2.36%)

LVMH $MC (-0.51%)

Nike $NKE (-4.96%)

Hims & Hers $HIMS (-9.32%)

AMD $AMD (-4.24%)

The Trade Desk $TTD (-3.73%)

Do you see it similarly? Are you currently holding one of these shares?

Hey dear community

these are turbulent times and the question arises as to what you would like to buy next or in the near future? 😎

I am now assuming a recovery

Buy list: $MSCI (-2.02%)
$CEG (-2.41%)

VG

Hello everyone,

My name is Antonio, I'm almost 27 years old and I'm from Bremen. I currently work as a train manager at Deutsche Bahn. Anyone who knows the job knows that chaos is almost guaranteed here. If a train is on time, everyone wonders what's going wrong. Delays, strikes, unforeseen events - you get used to the fact that nothing goes as expected. And that's exactly how I felt on the stock market: constantly chasing hypes, always on the lookout for quick profits, and in the end I never knew whether the train was still on the right track. I experienced just as much chaos on the markets as I did in my day-to-day work - but fortunately I've learned from it and am now looking for a fresh start where everything is a bit more orderly and predictable.

I've made a lot of mistakes on the stock market in the past. And not too few - unfortunately. Like many of you, I had the idea that the stock market would make me a quick buck. I let myself be led by hypes, trends and the desire for immediate results. I wasn't interested in investing for the long term or building a solid foundation for the future, I was only ever interested in making a quick profit. Leveraged products, knock-out certificates - it was all there. It felt like a casino where the loss was usually the only "win". And so it came as it had to: I not only lost money, but also confidence in my own decisions and the markets.

But today, in 2025, I have realized that it is time for a fresh start. I have learned from my mistakes. It's been a long road and I've thought a lot about why I was so quick to go for the quick buck instead of investing patiently and focusing on long-term success. I learned the lessons I needed to become a better investor. Patience, diversification and a long-term perspective are now my principles. I want to create something tangible, not just a portfolio full of numbers, but also a solid, long-term strategy that will help me to continuously build my wealth.

My portfolio: A solid foundation

The portfolio I have now built up is a mix of different asset classes and asset classes. My aim is to diversify broadly and not miss out on potential growth opportunities, while spreading risk across different sectors and regions. Here is an overview of what my investment strategy looks like:

ETFs (€1000/month)

I have deliberately opted for a broad diversification and invested in different geographical regions and markets. This diversification should ensure that my capital benefits from the markets that have the greatest potential in the coming decades.

- IE00BMTX1Y45 ( $I500) (-2.72%)

- LU0908500753 ( $MEUD (-0.88%) )

- IE00BYXVGY31 ( $FUSA (-2.23%) )

- IE00BD1F4M44 ( $IUVF (-2%) )

- IE00BKM4GZ66 ( $EIMI (-1.92%) )

- LU1681041973 ( $CD9 (-0.36%) )

- LU0486851024 ( $D5BL (-1.18%) )

- IE00BYQCZN58 ( $DXJZ (-2.72%) )

- IE00BF4RFH31 ( $WSML (-1.5%) )

- IE00BG0SKF03 ( $5MVL (-2.11%) )

- IE00B652H904 ( $SEDY (-1.5%) )

- LU2089238385 ( $PRAJ (-2.69%) )

- DE000A0H0744 ( $EXXW (-1.44%) )

- IE00BFXR5W90 ( $LGAG (-1.49%) )

- LU0779800910 ( $XCHA (-1.22%) )

- HANetf Future of Defense UCITS ETF ($ASWC (-2.59%) )

So many ETFs? Does he still have all his wits about him?

Some people will think exactly that when they look at my ETF list. And yes, I admit that the portfolio is pretty broadly based - perhaps too broad for some. But that's exactly my goal. I don't want to catch the one sector or the one region that is going through the roof. I want to have everything! If a market explodes somewhere in the world, then I want to be there. Be it through large caps, small caps, growth, value, technology or emerging markets, my approach is not to miss out on potential opportunities and at the same time not to put all my eggs in one basket. Some call it overdiversification, I call it my personal "all-world approach"

The idea behind the selection of these ETFs is that I want to focus on global markets and growth regions without missing out on important sectors such as technology, healthcare and energy. The USA (with over 55% of my portfolio) remains the central component due to its economic importance and innovative strength. At the same time, I am also focusing on Europe, Asia, China and emerging markets, which are increasingly among the growth markets of the future. Small caps also play a key role for me, as they often have the potential to grow faster and offer opportunities that are often overlooked by the large institutions.

Cryptocurrencies (€100/month in Bitcoin ( $BTC (-2.91%) ) €50/month in Ethereum ($ETH) (-3.49%)

I also invest in Bitcoin and Ethereum as I am convinced of the future of these digital currencies. Even if the volatility is high, I see the long-term potential of these technologies. For me, it is an opportunity to participate in the development of a new financial world.

Gold (50 €/month EUWAX Gold ($DE000EWG0LD1 (+0.77%) )

In uncertain times, I have realized how important it is to have conservative assets such as gold. The last few years of inflation and economic fluctuations have made me realize that gold can have a stabilizing effect, especially in times of crisis.

Individual stocks - My dividend strategy

I have also selected a few individual stocks that should not only offer me security, but also regular income through dividends. The reason for this is simple: I need something tangible, something visible. It's not just the pleasure of seeing the portfolio grow, but also the dividend that gives me the feeling of actively participating in the companies and benefiting from their success.

- 3M Co ($MMM (-3.03%) )

- Allianz ($ALV (-0.53%) )

- BioNTech ($BNTX (-0.82%) )

- Booking Holdings( $BKNG (-3.23%) )

- Coca-Cola ($KO (-1.63%) )

- LVMH ($MC (-0.51%) )

- MSCI Inc ($MSCI (-2.02%) )

- NextEra Energy($NEE (-0.59%) )

- Philip Morris ($PM (-0.35%) )

- Realty Income($O (+0.25%) )

BioNTech in particular, as a company that has promising potential not only during the pandemic but also beyond, is a long-term winner for me. Likewise NextEra Energy, which plays a key role in the renewable energy sector, and Booking Holdings, which should benefit from the global tourism trend. These companies not only pay dividends, but also show that you can benefit from a company's success with a long-term perspective.

Pension fund

I also invest in the DEVK pension fund (DE000A2PT1X3) through my employer $DE000A2PT1X3 . This fund is particularly important to me because of the generous contributions made by my employer and the solid returns. Even though the costs are somewhat higher, I see it as a long-term addition to my strategy.

Why this portfolio?

I built my portfolio this way because I believe in the potential of long-term global diversification. Rather than chasing short-term gains, I am looking for continuous value growth over many years. I want to support the right companies, benefit from promising markets and at the same time have a regular source of income through dividends.

I am no longer interested in making a quick buck. I have learned that true success in wealth accumulation lies in patience. And that's what it's all about: I want to create a solid foundation for the future - for myself, for my pension and perhaps for a house in a few years' time.

What do you think?

I'm really looking forward to hearing from you. What do you think of my strategy? Do you see any areas where I could diversify even more? Are there any asset classes or ETFs missing from my portfolio that would make sense for me? I am very keen to hear your opinions and advice.

Thank you for taking the time to read my story and strategy! I look forward to your feedback.

Best regards,

Antonio

Now the time has come.

I'm posting my portfolio.

I've had getquin for a while now and have recently started looking at the posts and find it interesting to see how other people invest and how different it is.

At the moment I'm relatively happy with how my portfolio is set up, but I thought that maybe some comments could inspire me.

I would probably like to buy one of these stocks next:

$ASML (-2.28%)

$MSCI (-2.02%)

$NOVO B (-3.33%)

What do you guys think? Hot or junk?

Insider purchases at a overview:

• MSCI $MSCI (-2.02%) - 15% drawdown and 11% from 52-week high
• Adobe $ADBE (-3.45%) - 33% drawdown and 26% from 52-week high
• Nike $NKE (-4.96%) - 60% drawdown and 34% from 52-week high
• Estée Lauder $EL (-2.93%) - 81% drawdown and 56% from 52-week high

Do you take action or do insider purchases play no role in your investment decisions?

Concrete transactions in detail (in green):

1) MSCI $MSCI (-2.02%)

2) Adobe $ADBE (-3.45%)

3) Nike $NKE (-4.96%)

4) Estée Lauder $EL (-2.93%)

ASML $ASML (-2.28%) (semiconductor equipment)

Visa $V (-2.66%) (payment transactions)

Mastercard $MA (-3.43%) (payment transactions)

Moody's $MCO (-3%) (credit ratings)

S&P Global $SPGI (-2.36%) (credit ratings and indices)

Hermès $RMS (-1.9%) (luxury goods)

Fair Isaac Corporation $FICO (-2.9%) (credit scoring)

Coca-Cola $KO (-1.63%) (beverages)

Apple $AAPL (-3.43%) (consumer electronics and technology)

Nvidia $NVDA (-2.82%) (AI and GPUs)

Also also worth mentioningbut not in the top 10:

Transdigm $TDG (-1.15%) (aerospace)

MSCI $MSCI (-2.02%) (financial services)

Cadence $CDNS (-3.26%) (EDA software)

Synopsys $SNPS (-3.42%) (EDA software)

Ferrari $RACE (+0.02%) (luxury cars)

What do you think? Have I forgotten an interesting company / share?