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Intelligent Indexer: Walking the Reconstitution Tightrope During the Market Meltdown

The timing of the coronavirus outbreak posed unprecedented challenges for index providers. Here's how Morningstar navigated the turmoil.

With this column, we kick off a new series for asset-management professionals written by Morningstar's head of index products, Sanjay Arya. This article is adapted from research that was originally published in Morningstar Direct's Research Portal. If you're a user, you have access. If not, take a free trial.

The market turmoil that rattled global markets following the outbreak of the coronavirus had a wide-ranging impact on the financial ecosystem. A combination of extreme market volatility in the first quarter of 2020 and loss of liquidity put global asset managers in the eye of the storm. Perhaps less visible were the challenges posed to index fund managers and index providers who support trillions of dollars in passively run strategies.