MSCI World

Last updated

MSCI World Price Index (1969-2020) MSCI World Price Index - History 1969 - 2020.svg
MSCI World Price Index (1969-2020)
Map of all countries included in the MSCI World index as of 28 Sep 2018 Msciworldmap.png
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 1,300 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.[ citation needed ]

Contents

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.[ clarification needed ] 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:

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]

CriterionThreshold (June 2025 framework)Purpose
Economic developmentGross 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

(entryrequirement)

≥ 5 companies that, in each of the last eight index reviews, individually satisfy: Ensures a sufficiently deep investable universe
Size & liquidity (maintenancerequirement)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 universePreserves index stability
Market accessibilityRated "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
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:

Sector representation

Sector weights in MSCI World Index as of July 2025
  1. Information Technology (26.85%)
  2. Financials (16.69%)
  3. Industrials (11.44%)
  4. Consumer Discretionary (10.11%)
  5. Health Care (9.12%)
  6. Consumer Staples (5.75%)
  7. Communication Services (8.48%)
  8. Energy (3.52%)
  9. Materials (3.15%)
  10. Utilities (2.65%)
  11. Real Estate (1.97%)

Total annual returns

YearGross Annual
Return (a) [ citation needed ] [7]
1970−1.98%
197119.56%
197223.55%
1973−14.51%
1974−24.48%
197534.50%
197614.71%
19775.00%
197818.22%
197912.67%
198027.72%
1981−3.30%
198211.27%
198323.28%
19845.77%
198541.77%
198642.80%
198716.76%
198823.95%
198917.19%
1990−16.52%
199118.97%
1992−4.66%
199323.13%
19945.58%
199521.32%
199614.00%
199716.23%
199824.80%
199925.34%
2000−12.92%
2001−16.52%
2002−19.54%
200333.76%
200415.25%
200510.02%
200620.65%
20079.57%
2008−40.33%
200930.79%
201012.34%
2011−5.02%
201216.54%
201327.37%
20145.50%
2015−0.32%
20168.15%
201723.07%
2018−8.20%
201928.40%
202016.50%
202122.35%
2022−17.73%
202324.42%
202419.19%

See also

References

  1. 1 2 "MSCI World Index - Factsheet" (PDF). msci.com. Retrieved 7 August 2025.
  2. ↑ "MSCI World Index - Constituents". msci.com. Retrieved 2 April 2024.
  3. ↑ "Frontier markets" (PDF).
  4. ↑ start date of MSCI World FREE index history is December 31, 1969
  5. ↑ "Market Classification". www.msci.com. Retrieved 25 June 2025.
  6. ↑ MSCI (June 2025). "MSCI Market Classification Framework" (PDF). Retrieved 25 June 2025.
  7. ↑ "MSCI World Index (USD)".
  8. ↑ "Index tools - MSCI". mscibarra.com. Archived from the original on 25 January 2010. Retrieved 22 January 2010.
  9. ↑ "MSCI WORLD INDEX (USD)" . Retrieved 12 January 2019.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.