Our Q2 MSCI rebalancing predictions

Ahead of each quarter’s MSCI World rebalancing, we assess the accuracy of our predictions for the prior quarter’s rebalancing and release our predictions for upcoming changes to the index. With the second-quarter 2026 rebalancing announcement set for May 12, we evaluate our performance for the first quarter of 2026 and look ahead at the approaching announcement.

For the first quarter, our prediction score showed strong directional accuracy amid lower overall turnover. During the first quarter, MSCI announced 18 adds and 27 deletes in the MSCI World Index, for a total of 45 constituent changes. We correctly predicted 35 of the 45 changes and notably had no incorrect predictions this quarter. Consequently, our Rebalance Accuracy Score came in at 78, modestly below our longer-term average. This quarter’s activity was notably lower than the fourth quarter of 2025, when there were 51 changes.

We always like to emphasize that every rebalance is different. This is why we tend to put more weight on our cumulative average score as an indication of the efficiency of our approach, rather than focusing on the score from a single quarter. Figure 1 highlights the durability of our approach over time, reflecting a process designed to remain robust and consistent across varied market and index environments.

Figure 1: MSCI rebalance prediction history

Source: L&G – Asset Management, America. Data as of February 18, 2026.

Our latest predictions

Figure 2 highlights our predictions for the second quarter of 2026 MSCI rebalance. The key dates for this cycle are the following:

• 10 business day window: April 17 - April 30.
• Announcement: May 12.
• Implementation point: Close of Friday, May 29, but may be different for some markets (e.g., market holiday, exchange closures).

Figure 2: Our MSCI predictions for Q2 2026

Benchmark	Country	Name	Prediction
World ex USA	Australia	PLS GROUP LTD	Add
World ex USA	Canada	OPEN TEXT CORP	Delete
World ex USA	France	ABIVAX SA	Add
World ex USA	Germany	LEG IMMOBILIEN SE	Delete
World ex USA	Hong Kong	WHARF HOLDINGS LTD	Delete
World ex USA	Israel	ENLIGHT RENEWABLE ENERGY LTD	Add
World ex USA	Israel	OPC ENERGY LTD	Add
World ex USA	Israel	HAREL INSURANCE INVESTMENTS	Add
World ex USA	Israel	MONDAY.COM LTD	Delete
World ex USA	Israel	NICE LTD	Delete
World ex USA	Japan	FURUKAWA ELECTRIC CO LTD	Add
World ex USA	Japan	RESONAC HOLDINGS CORP	Add
World ex USA	Japan	MITSUI KINZOKU CO LTD	Add
World ex USA	Japan	JAPAN AIRLINES CO LTD	Delete
World ex USA	Japan	TSURUHA HOLDINGS INC	Delete
World ex USA	Japan	TIS INC	Delete
World ex USA	Japan	SYSMEX CORP	Delete
World ex USA	Japan	MONOTARO CO LTD	Delete
World ex USA	Japan	MATSUKIYOCOCOKARA & CO	Delete
World ex USA	Japan	ZOZO INC	Delete
World ex USA	Japan	SONY FINANCIAL GROUP INC	Delete
World ex USA	Japan	M3 INC	Delete
World ex USA	Japan	SEKISUI CHEMICAL CO LTD	Delete
World ex USA	Japan	ORACLE CORP JAPAN	Delete
World ex USA	Japan	TOYOTA INDUSTRIES CORP	Delete
World ex USA	Netherlands	RANDSTAD NV	Delete
World ex USA	Sweden	MILLICOM INTL CELLULAR S.A.	Add
World ex USA	Sweden	HOLMEN AB-B SHARES	Delete
World ex USA	United Kingdom	JD SPORTS FASHION PLC	Delete
World ex USA	United Kingdom	BARRATT REDROW PLC	Delete
World ex USA	United Kingdom	ENTAIN PLC	Delete
World ex USA	United Kingdom	WHITBREAD PLC	Delete
USA	United States	AMERICAN HOMES 4 RENT- A	Delete
USA	United States	BENTLEY SYSTEMS INC-CLASS B	Delete
USA	United States	NUTANIX INC - A	Delete
USA	United States	MEDLINE INC-CL A	Add
USA	United States	CIRCLE INTERNET GROUP INC	Add
USA	United States	SHARKNINJA INC	Add
USA	United States	TECHNIPFMC PLC	Add
USA	United States	MASTEC INC	Add
USA	United States	XPO INC	Add
USA	United States	FABRINET	Add
USA	United States	JACK HENRY & ASSOCIATES INC	Delete
USA	United States	BUILDERS FIRSTSOURCE INC	Delete
USA	United States	SNAP INC - A	Delete
USA	United States	UNIVERSAL HEALTH SERVICES-B	Delete
USA	United States	UDR INC	Delete
USA	United States	AECOM	Delete
USA	United States	ZEBRA TECHNOLOGIES CORP-CL A	Delete
USA	United States	ZILLOW GROUP INC - C	Delete
USA	United States	HEALTHPEAK PROPERTIES INC	Delete
USA	United States	DRAFTKINGS INC-CL A	Delete
USA	United States	HORMEL FOODS CORP	Delete
USA	United States	GARTNER INC	Delete
USA	United States	EQUITABLE HOLDINGS INC	Delete
USA	United States	TRADE DESK INC/THE -CLASS A	Delete
USA	United States	GODADDY INC - CLASS A	Delete
USA	United States	SOLVENTUM CORP	Delete
USA	United States	HUBSPOT INC	Delete
USA	United States	OKLO INC	Delete
USA	United States	GEN DIGITAL INC	Delete
USA	United States	CLOROX COMPANY	Delete

Source: L&G – Asset Management, America as April 27, 2026. For illustrative purposes only.

Prediction process 

We have designed and implemented a low active risk approach to capture outperformance created by index micro inefficiencies. In our investment approach, we target a variety of opportunities, one being rebalance predictions, where we model widely followed approaches to predict index additions and deletions. This predictive capability provides an opportunity for us to optimize portfolio adjustments before official index announcements, potentially enhancing returns. Here’s how it works for an MSCI rebalance: 

• On a quarterly basis, MSCI will re-establish its market cap weighted index series using a publicly available methodology, which means it can be independently modeled with reasonable certainty.
• We identify which companies we believe will be reclassified between the Standard (Large + Mid Cap) indices and Small Cap indices.
• MSCI selects one of ten days at the end of the month prior to the actual rebalance to crystalize sizing classifications.
• A public notification of the changes happens approximately two weeks before the rebalance, with the rebalance happening at the end of the month (February, May, August, November cycle).  ns based on the following method: 

After the rebalance period ends, we evaluate our predictions based on the following method:

• Correct prediction (i.e., True positive; 1 point)—We assign ourselves one point for every accurate add or delete prediction.
• Incorrect prediction (i.e., False positive; -1 point)—One point is deducted for every prediction that is not ultimately added or deleted by MSCI.
• No prediction (i.e., False negative; 0 points)—No points are assigned or deducted for an add or delete that was not originally predicted.  
• We add up the total number of points and divide it by the total number of adds and deletes implemented by MSCI to determine the Rebalance Accuracy Score. While we do not expect to achieve perfect accuracy, our aim is to maximize correct predictions and minimize mistakes. Accurately predicting this information in advance is knowing what trillions of dollars are likely to do before they do it. 

Disclosures

Unless otherwise stated, references herein to "LGIM", "we" and "us" are meant to capture the global conglomerate that includes Legal & General Investment Management Ltd. (a U.K. FCA authorized adviser), Legal & General Investment Management America, Inc. (a U.S. SEC registered investment adviser) and Legal & General Investment Management Asia Limited (a Hong Kong SFC registered adviser). The LGIM Stewardship Team acts on behalf of all such locally authorized entities.

This material is intended to provide only general educational information and market commentary. Views and opinions expressed herein are as of the date set forth above and may change based on market and other conditions. The material may not be reproduced or distributed. The material is for informational purposes only and is not intended as a solicitation to buy or sell any securities or other financial instrument or to provide any investment advice or service. Legal & General Investment Management America, Inc. does not guarantee the timeliness, sequence, accuracy or completeness of information included. Past performance should not be taken as an indication or guarantee of future performance and no representation, express or implied, is made regarding future performance.

Certain of the information contained herein represents or is based on forward-looking statements or information, including descriptions of anticipated market changes and expectations of future activity. Forward-looking statements and information are inherently uncertain and actual events or results may differ from those projected. Therefore, undue reliance should not be placed on such forward-looking statements and information. There is no guarantee that LGIM America's investment or risk management processes will be successful.