What Is the MSCI Emerging Markets Index?

"MSCI Country Index" is collected by Morgan Stanley Capital International Corporation (MSCI) for each listed company's stock price, circulation, major shareholder holdings, free float, monthly trading volume and other data. The industry classification standard (GICS) is used for classification. In each industry, 60% of the market value of stocks are selected as constituent stocks. The selection criteria include size (market value), long-term and short-term trading volume, cross-shareholdings, and the number of shares outstanding. Because Morgan Stanley Capital International first divides the industry and then selects stocks from the industry, this ensures that each industry in the index portfolio has a relatively fixed proportion of stocks, making the index more representative of the industry.

MSCI Country Index

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"MSCI Country Index" consists of

Morgan Stanley Capital International, referred to as MSCI, is an international company that provides global indices and related derivative financial products. Its MSCI index is widely used by investors. Global investment professionals, including portfolio managers, brokers and dealers, and exchanges , Investment consultants, academics, and financial media all use the MSCI index. The MSCI Index is the most commonly used investment target among portfolio managers worldwide. According to MSCI estimates, in North America and Asia, more than 90% of institutional international equity assets are based on the MSCI index. According to a Merrill Lynch / Gallup survey, about two-thirds of continental European fund managers use MSCI as an index supplier. The MSCI Index is also the subject of mutual funds, chartered to evaluate index-related funds, research, and proprietary products. Currently more than 1,400 customers worldwide use MSCI as the target.

In May 2001, MSCI announced that it will compile the index based on the "free float shares" weight calculation method. The new index will also increase the market value range from 60% to 85%. MSCI plans to complete the new calculation of free float shares in two stages. It was November 30, 2001, followed by May 31, 2002. The financial market estimates that MSCI's unprecedented adjustment of the index weighting will trigger nearly 630 billion U.S. dollars in global capital flows. At the same time, it will have a great impact on funds operating with MSCI as the target, with an estimated amount of 3.5 trillion U.S. dollars. The impact of MSCI on global financial markets is evident.

MSCI is headquartered in New York, with offices in Geneva, Switzerland and Singapore, responsible for the global business operations, as well as regional offices in London, England, Tokyo, Japan, Hong Kong, China and San Francisco, USA. Its employees come from all over the world and have more than a hundred fulltime people.

The reason why the MSCI Index can be recognized by legal persons of international organizations as a reference for capital allocation is mainly based on the following factors:

Objectivity: When compiling the index, MSCI must first compile it according to scientific methods after studying the political economy of each country through professionals, and unify the calculation formulas of the indexes so that the indexes can be compared for long-term performance.

Fairness: MSCI maintains a high degree of confidentiality in the process of compiling the index; in the future, it maintains a high degree of rigor; when changing the calculation formula, it maintains a high degree of neutrality to avoid a large amount of funds flowing into the local market and increasing instability.

Practicality: In addition to calculating the index denominated in the local currency, MSCI will also compile a stock price index denominated in US dollars in addition to the index denominated in local currencies, making it easier for international investors to compare.

For reference: For international fund managers and investment agency legal persons, only by establishing a portfolio of good performance can the market be defeated. However, the compilation methods of stock price indexes in different countries, coupled with changes in exchange rates of various countries, will also affect the return on investment, which will cause problems in both investment reference and performance evaluation. And MSCI has considered the above factors when compiling the index.

Mobility: With changes in the company's finances and stock prices, or changes in political economy and legal restrictions, the stock price index will lose its reference value after a period of time? And MSCI will adjust its constituent stocks every quarter to avoid The problem.

Openness: MSCI's index is disseminated through many media, and information about daily index changes or index content changes is quickly disseminated through the website and international media such as Reuters and Bloomberg.

MSCI provides a series of indexes used by international investors, including:

MSCI ACWI (All Country World Index) Free IndexSM: An index measuring the performance of the global securities market adjusted for free circulation market value. As of April 2002, the index is composed of 49 developed countries and emerging market countries (regions);

MSCI World IndexSM: Consists of 23 developed countries.

MSCI EAFE Index (Europe Australia Far East), consisting of other developed countries except the United States and Canada;

MSCI EMF (Emerging Markets Free) IndexSM: composed of 28 emerging market countries;

MSCI EMF (Emerging Markets Free) Latin America IndexSM, consisting of 7 emerging market countries in Latin America;

MSCI EM (Emerging Markets) Eastern Europe IndexSM, consisting of 10 emerging market countries in Eastern Europe, the Middle East, and Africa;

MSCI Europe IndexSM, consisting of 16 developed countries in Europe;

MSCI EMU (European Economic and Monetary Union) IndexSM: composed of 11 countries in the euro area;

MSCI AC (All Country) Far East Free ex Japan IndexSM: Consists of 9 Far East developed and emerging market countries except Japan.

In addition, it also includes some characteristic indexes and fixed income indexes. The launch time of various indexes is as follows:

Developed Market Series in 1969; Emerging Market Series in 1987; All Country Series in 1995; Developed Market Series and Emerging Market Series in 1997 Value & Growth Indices for DM & EM Series; 1998, Small and Medium Enterprises Index and Fixed Income Index? Small Cap and Extended Indices; Fixed Income Indices; 1999, Euro Indices; 2000, China And the Golden Dragon Index (Zhong Hua and Golden Dragon Indices).

The MSCI National Index is weighted using Free Float-adjusted Market Capitalization. MSCI defines free float as the proportion of tradable shares that can be invested by international investors in the public securities market. The total issuance method is used to deduct certain shares held by strategic investors and other shareholders that are considered to be non-freely tradable. Restrictions on holders of shares. MSCI uses a graded progressive free-flow decomposition factor to adjust the liquidity.