A Simulated Look at the Constituents Inside the MSCI USA High Dividend Index

The MSCI USA High Dividend Index outperformed its broader parent, the MSCI USA Standard Core, by a handsome amount since June 1995, the earliest backtest date for the index. That's a good omen for dividend income oriented investors. Let's look at the relative performance of those two indexes and then "reverse engineer" the MSCI methodology to simulate the constituents of the high dividend index. MSCI only releases index constituents to index subscribers. So far there is no investment fund that specifically tracks the index. They do, however, publish their methodology. We use a simulation of their methodology to make a pretty good guess what stocks are in the index. If there were an investment fund that tracked the high dividend index with replication, we could simply download the fund holdings. Unfortunately, there does not appear to be such a fund. We contacted MSCI about funds tracking that index and they... Read more