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[[File:Msciworldmap.png|thumb|Map of all countries included in the MSCI World index as of 28 Sep 2018]] | [[File:Msciworldmap.png|thumb|Map of all countries included in the MSCI World index as of 28 Sep 2018]] | ||
The '''MSCI World''' is a widely followed global [[stock market index]] that tracks the performance of around 1,500 large and mid-cap companies across 23 developed countries.<ref>{{cite web|url=https://www.msci.com/resources/factsheets/index_fact_sheet/msci-world-index.pdf|publisher=msci.com|title=MSCI World Index - Factsheet|access-date=2024-04-02}}</ref><ref>{{cite web|url=https://www.msci.com/constituents|publisher=msci.com|title=MSCI World Index - Constituents|access-date=2024-04-02}}</ref> It is maintained by [[MSCI]], formerly Morgan Stanley Capital International, and is used as a common benchmark for global [[stock fund]]s intended to represent a broad cross-section of global markets. | The '''MSCI World''' is a widely followed global [[stock market index]] that tracks the performance of around 1,500 large and mid-cap companies across 23 developed countries.<ref>{{cite web|url=https://www.msci.com/resources/factsheets/index_fact_sheet/msci-world-index.pdf|publisher=msci.com|title=MSCI World Index - Factsheet|access-date=2024-04-02}}</ref><ref>{{cite web|url=https://www.msci.com/constituents|publisher=msci.com|title=MSCI World Index - Constituents|access-date=2024-04-02}}</ref> It is maintained by [[MSCI]], formerly Morgan Stanley Capital International, and is used as a common benchmark for global [[stock fund]]s intended to represent a broad cross-section of global markets.{{Citation needed|date=June 2025}} | ||
The index includes a collection of [[Share capital|stock]]s of all the [[developed market]]s in the world, as defined by MSCI. The exclusion of stocks from emerging and frontier economies makes the index | The index includes a collection of [[Share capital|stock]]s of all the [[developed market]]s in the world, as defined by MSCI. The exclusion of stocks from emerging and frontier economies makes the index narrower in global coverage than the name suggests.{{Elaborate|date=June 2025}} A related index, the MSCI All Country World Index (ACWI), incorporates both developed and emerging countries. MSCI also produces a Frontier Markets index, including another 31 markets.<ref>{{Cite web |title=Frontier markets |url=https://www.northerntrust.com/documents/white-papers/asset-management/frontier-markets-rise-again.pdf}}</ref> | ||
The MSCI World Index has been calculated since 1969,<ref>[http://www.msci.com start date of ''MSCI World FREE'' index history is December 31, 1969]</ref> in various forms: without [[dividend]]s (Price Index), with net or with gross dividends reinvested (Net and Gross Index), in [[US dollars]], [[Euro]] and local currencies. | The MSCI World Index has been calculated since 1969,<ref>[http://www.msci.com start date of ''MSCI World FREE'' index history is December 31, 1969]</ref> in various forms: without [[dividend]]s (Price Index), with net or with gross dividends reinvested (Net and Gross Index), in [[US dollars]], [[Euro]] and local currencies. | ||
== | == Index Composition Methodology == | ||
The index includes companies in the following countries | The MSCI World Index is constructed by classifying equity securities from developed market countries into large-cap and mid-cap segments based on their free float-adjusted market capitalization. | ||
Market capitalization refers to the total market value of a company's outstanding shares, calculated as the share price multiplied by the total number of shares. In MSCI's methodology, this figure is adjusted for [[Public float|free-float]]: meaning only shares available for public trading are counted, excluding those held by insiders, governments, or other holders who are unlikely to trade. | |||
Within each developed market country, MSCI ranks companies by their free float-adjusted market capitalization and includes: | |||
* Large-cap stocks: companies that collectively account for approximately the top 70% of the cumulative market capitalization | |||
* Mid-cap stocks: companies that bring the cumulative total of market capitalization up to 85% | |||
The MSCI index excludes the remaining 15% of market capitalization segment, corresponding to low-cap stocks. | |||
This segmentation ensures that the MSCI World Index captures roughly 85% of the investable equity universe in each country, providing broad and representative coverage of developed market equities. | |||
== Market Classification Methodology == | |||
MSCI evaluates a country's equity market as "developed" if all of the following criteria are met:<ref>{{Cite web |title=Market Classification |url=https://www.msci.com/indexes/index-resources/market-classification |access-date=2025-06-25 |website=www.msci.com |language=English}}</ref><ref>{{cite web |author=MSCI |date=June 2025 |title=MSCI Market Classification Framework |url=https://www.msci.com/downloads/web/msci-com/indexes/index-resources/market-classification/MSCI_MARKET_CLASSIFICATION_FRAMEWORK_2025.pdf |access-date=25 June 2025}}</ref> | |||
{| class="wikitable" | |||
| align="center" |'''Criterion''' | |||
| align="center" |'''Threshold (June 2025 framework)''' | |||
| align="center" |'''Purpose''' | |||
|- | |||
| align="left" |'''Economic development''' | |||
| align="left" |Gross National Income (GNI) per capita ≥ 125 % of the World Bank high-income threshold | |||
(i.e., ≥ USD 17,506 based on the USD 14,005 2023 benchmark) for three consecutive years | |||
| align="left" |Demonstrates sustained high income level | |||
|- | |||
| align="left" |'''Size & liquidity''' | |||
'''(entry''' '''requirement)''' | |||
| align="left" |≥ 5 companies that, in each of the last eight index reviews, individually satisfy: | |||
* full market cap ≥ USD 5.9 billion; and | |||
* free-float cap ≥ USD 3.0 billion; and | |||
* 12-month [[Market liquidity|annualized traded value ratio]] (ATVR) ≥ 20 % | |||
| align="left" |Ensures a sufficiently deep investable universe | |||
|- | |||
| align="left" |'''Size & liquidity (maintenance''' '''requirement)''' | |||
| align="left" |Even after inclusion, ≥ 1 company must continue to meet the above size-and-liquidity figures, and the market must retain ≥ 5 securities in its investable equity universe | |||
| align="left" |Preserves index stability | |||
|- | |||
| align="left" |'''Market accessibility''' | |||
| align="left" |Rated "Very High" or "Unrestricted" across the five sub-criteria: | |||
* openness to foreign ownership, | |||
* free capital flows, | |||
* efficient operational framework, | |||
* unrestricted investment instruments, | |||
* a stable institutional environment | |||
| align="left" |Guarantees seamless access for global investors | |||
|} | |||
MSCI monitors all countries continuously, but formal reclassification consultations occur each spring, with decisions announced the following June and implemented in quarterly index reviews. Off-cycle announcements are reserved for exceptional market events. | |||
==Country representation== | |||
The index includes companies in the following 23 countries: | |||
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}} | }} | ||
The [[Global Industry Classification Standard|GICS]] breakdown is shown here, with information technology being the biggest sector. | The [[Global Industry Classification Standard|GICS]] breakdown is shown here, with information technology being the biggest sector.{{Citation needed|date=June 2025|reason=Please specify the year or date of the source.}} | ||
==Total annual returns== | ==Total annual returns== | ||
Latest revision as of 07:18, 28 June 2025
Template:Use dmy dates Template:Short description
The MSCI World is a widely followed global stock market index that tracks the performance of around 1,500 large and mid-cap companies across 23 developed countries.[1][2] It is maintained by MSCI, formerly Morgan Stanley Capital International, and is used as a common benchmark for global stock funds intended to represent a broad cross-section of global markets.Script error: No such module "Unsubst".
The index includes a collection of stocks of all the developed markets in the world, as defined by MSCI. The exclusion of stocks from emerging and frontier economies makes the index narrower in global coverage than the name suggests.Template:Elaborate A related index, the MSCI All Country World Index (ACWI), incorporates both developed and emerging countries. MSCI also produces a Frontier Markets index, including another 31 markets.[3]
The MSCI World Index has been calculated since 1969,[4] in various forms: without dividends (Price Index), with net or with gross dividends reinvested (Net and Gross Index), in US dollars, Euro and local currencies.
Index Composition Methodology
The MSCI World Index is constructed by classifying equity securities from developed market countries into large-cap and mid-cap segments based on their free float-adjusted market capitalization.
Market capitalization refers to the total market value of a company's outstanding shares, calculated as the share price multiplied by the total number of shares. In MSCI's methodology, this figure is adjusted for free-float: meaning only shares available for public trading are counted, excluding those held by insiders, governments, or other holders who are unlikely to trade.
Within each developed market country, MSCI ranks companies by their free float-adjusted market capitalization and includes:
- Large-cap stocks: companies that collectively account for approximately the top 70% of the cumulative market capitalization
- Mid-cap stocks: companies that bring the cumulative total of market capitalization up to 85%
The MSCI index excludes the remaining 15% of market capitalization segment, corresponding to low-cap stocks.
This segmentation ensures that the MSCI World Index captures roughly 85% of the investable equity universe in each country, providing broad and representative coverage of developed market equities.
Market Classification Methodology
MSCI evaluates a country's equity market as "developed" if all of the following criteria are met:[5][6]
| Criterion | Threshold (June 2025 framework) | Purpose |
| Economic development | Gross National Income (GNI) per capita ≥ 125 % of the World Bank high-income threshold
(i.e., ≥ USD 17,506 based on the USD 14,005 2023 benchmark) for three consecutive years |
Demonstrates sustained high income level |
| Size & liquidity
(entry requirement) |
≥ 5 companies that, in each of the last eight index reviews, individually satisfy:
|
Ensures a sufficiently deep investable universe |
| Size & liquidity (maintenance requirement) | Even after inclusion, ≥ 1 company must continue to meet the above size-and-liquidity figures, and the market must retain ≥ 5 securities in its investable equity universe | Preserves index stability |
| Market accessibility | Rated "Very High" or "Unrestricted" across the five sub-criteria:
|
Guarantees seamless access for global investors |
MSCI monitors all countries continuously, but formal reclassification consultations occur each spring, with decisions announced the following June and implemented in quarterly index reviews. Off-cycle announcements are reserved for exceptional market events.
Country representation
The index includes companies in the following 23 countries:
- Australia
- Austria
- Belgium
- Canada
- Denmark
- Finland
- France
- Germany
- Hong Kong
- Ireland
- Israel
- Italy
- Japan
- Netherlands
- New Zealand
- Norway
- Portugal
- Singapore
- Spain
- Sweden
- Switzerland
- United Kingdom
- United States
Sector representation
Template:Pie chart The GICS breakdown is shown here, with information technology being the biggest sector.Script error: No such module "Unsubst".
Total annual returns
| Year | Gross Annual Return (a) Script error: No such module "Unsubst".[7] |
|---|---|
| 1970 | −1.98% |
| 1971 | 19.56% |
| 1972 | 23.55% |
| 1973 | −14.51% |
| 1974 | −24.48% |
| 1975 | 34.50% |
| 1976 | 14.71% |
| 1977 | 5.00% |
| 1978 | 18.22% |
| 1979 | 12.67% |
| 1980 | 27.72% |
| 1981 | −3.30% |
| 1982 | 11.27% |
| 1983 | 23.28% |
| 1984 | 5.77% |
| 1985 | 41.77% |
| 1986 | 42.80% |
| 1987 | 16.76% |
| 1988 | 23.95% |
| 1989 | 17.19% |
| 1990 | −16.52% |
| 1991 | 18.97% |
| 1992 | −4.66% |
| 1993 | 23.13% |
| 1994 | 5.58% |
| 1995 | 21.32% |
| 1996 | 14.00% |
| 1997 | 16.23% |
| 1998 | 24.80% |
| 1999 | 25.34% |
| 2000 | −12.92% |
| 2001 | −16.52% |
| 2002 | −19.54% |
| 2003 | 33.76% |
| 2004 | 15.25% |
| 2005 | 10.02% |
| 2006 | 20.65% |
| 2007 | 9.57% |
| 2008 | −40.33% |
| 2009 | 30.79% |
| 2010 | 12.34% |
| 2011 | −5.02% |
| 2012 | 16.54% |
| 2013 | 27.37% |
| 2014 | 5.50% |
| 2015 | −0.32% |
| 2016 | 8.15% |
| 2017 | 23.07% |
| 2018 | −8.20% |
| 2019 | 28.40% |
| 2020 | 16.50% |
| 2021 | 22.35% |
| 2022 | −17.73% |
| 2023 | 24.42% |
| 2024 | 19.19% |
- (a) Total returns including reinvested dividends.[8][9]
See also
- FTSE Global Equity Index Series (FTSE All-World Index)
- Exchange-traded fund
- MSCI EAFE
- S&P Global 1200
- Stock market index
References
- ↑ Script error: No such module "citation/CS1".
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- ↑ start date of MSCI World FREE index history is December 31, 1969
- ↑ Script error: No such module "citation/CS1".
- ↑ Script error: No such module "citation/CS1".
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- ↑ Script error: No such module "citation/CS1".Template:Dead link
- ↑ Script error: No such module "citation/CS1".