Is MSCI's IPO hot or not?

Initial public offerings, exchange-traded funds and spin-off spotting – three of my favorite topics to blog about. Today you get a three-for-one deal. Morgan Stanley filed this week to spin-off a portion of its indexing and data crunching arm, MSCI, in an IPO. MSCI, which publishes zillions of widely followed market indexes and provides analytical software, has been growing like a weed on the back of licensing revenue from ETF sponsors creating funds based on its indexes. At the end of May there were over 500 ETFs trading just in the U.S., triple the number from the beginning of 2005. And total ETF assets are nearing $500 billion, double the level from the beginning of 2006, according to the Investment Company Institute. With the ETF market exploding not just in the number of new funds but also measured by assets in the largest funds, MSCI wins twice. Worldwide, 152 ETFs holding $156 billion licensed MSCI indexes as of June 30.

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