MSCI INDEX (Syllabus: GS Paper 3 – Economy)

Context: Taiwan’s weighting in the MSCI Emerging Markets Index rose to 14.2 per cent, behind leader China’s at 31.2 percent, while India’s fell to the third spot with 13 percent, according to Bloomberg-compiled data.

MSCI Index

• About: The MSCI World is a stock market index of 1,643 world stocks. 
• It is maintained by MSCI Inc., formerly Morgan Stanley Capital International, and is used as a common benchmark for ‘world’ or ‘global’ stock funds.
• The index includes a collection of stocks of all the developed markets in the world, as defined by MSCI. 
• The index includes securities from 23 countries but excludes stocks from emerging and frontier economies making it less worldwide than the name suggests. 
• A related index, the MSCI All Country World Index (ACWI), incorporated both developed and emerging countries. 
• MSCI also produces a Frontier Markets index, including another 31 markets.
• MSCI Index India: As per the official definition, the MSCI Index India is used to evaluate the performance of large and mid-cap segments of the Indian market. 

o MSCI Global Investable Indexes (GIMI) Methodology is used for MSCI Index India.

o Around 85 percent of the Indian equity universe is covered by the MSCI Index India.

o There are four constituents: Largest, Smallest, Average, and Median.

• Significance: It is considered to be one of the important indices that focus on different geographic areas and stock types such as small-caps, mid-caps, and large-caps.