MSCI previously excluded the foreign but U.S.-listed companies from its regional indexes.
"Most investors, when they invest in China, (it) is a lot of exposure to banks. … MSCI will increase exposure to tech," said Brendan Ahern, chief investment officer of KraneShares, which offers China-focused ETFs.
MSCI added mostly tech-oriented names: 58.com, Alibaba, Baidu, Ctrip.com, JD.com, NetEase, New Oriental Education, Qihoo 360 Technology, Qunar, SouFun Holdings, TAL Education, VipShop, Youku Tudou and YY.
China-based media company Youku Tudou agreed last Friday to an acquisition by Alibaba for $27.60 per American depositary share.
All changes will be implemented as of the close of Nov. 30. MSCI said it will first add the foreign-listed companies at half their free float-adjusted market cap, and add the remaining market capitalization at the May 2016 semiannual index review.
MSCI said about $1.6 trillion in total active and passive funds is benchmarked to MSCI's emerging market index, for which the most popular ETF is the iShares' EEM.
Funds that track the MSCI indexes will need to reallocate assets to reflect Thursday's decision. As a result of the inclusion of the U.S.-listed Chinese stocks, Ahern estimates $70 billion could flow into the underlying securities.
Stocks listed in mainland China, known as A-shares, are under review for inclusion in the index.
At its review in June, MSCI declined to immediately add the A-shares. The firm said it expected to include the mainland-listed stocks in the index after several issues, including liquidity and ownership, are resolved.
Ahern said China has made progress in those areas and investors should expect inclusion in the emerging market index as soon as next year.