|Bloomberg code||MXWO <INDEX>|
The MSCI World is an equity index that reflects the performance of more than 1,600 stocks from 23 industrialized countries . It is one of the most important stock indices worldwide and is published by the US financial services provider MSCI . The individual stock corporations therein are weighted according to their respective free float market capitalization .
MSCI counts the following 23 countries among the industrialized countries:
- America: Canada , United States
- Europe: Belgium , Denmark , Germany , Finland , France , Great Britain , Ireland , Italy , Netherlands , Norway , Austria , Portugal , Sweden , Switzerland , Spain
- Middle East: Israel
- Asia / Pacific: Australia , Hong Kong , Japan , New Zealand , Singapore
The index contains more than 1,600 stocks from these countries (as of May 2020). Because of its high share of global market capitalization , the United States is by far the most important country in the index with a share of more than 65%. Japan (8%), Great Britain (5%), France (3%) and Switzerland (3%) follow with significantly lower shares. The index is therefore heavily dependent on the US stock market. Therefore, the value at the American stock exchange trading time (from 3:30 p.m. CET) is particularly meaningful.
The largest industries in the MSCI World are information technology with a share of more than 19%, the health industry (15%) and the financial sector (13%).
The weight of the ten largest individual values is around 16%. These include Apple, Microsoft, Amazon and Alphabet with weights between 2% and 3.5%.
In 2016, the South Korean government campaigned for it to be upgraded to an industrial state and included in the MSCI World Index. While other index providers such as FTSE and S&P classify South Korea as an industrialized country, MSCI continues to classify the country as an emerging market. The reasons are that foreign investors in South Korea are subject to certain restrictions and the national currency won is not freely tradable.
The index is calculated by MSCI once a minute in three variants: as a price index , as a performance index without taking into account withholding taxes and as a performance index taking into account withholding taxes. The price index is usually published. The shares whose home stock exchanges are open are included with their continuously updated values, the remaining shares are included with their respective closing price from the previous day.
The MSCI World has been determined since March 31, 1968 (reference value on December 31, 1969: 100 points).
Differentiation from alternative indices
Even small caps ( small caps ) that are not to the free float-adjusted market capitalization 85% of the largest public companies include the respective industrial country are not represented in the MSCI World. Instead, they can be found in the MSCI World Small Cap Index, provided they do not belong to the 1% of the smallest public companies in the respective industrialized country.
The MSCI All Country World Investable Market Index (MSCI ACWI IMI Index) with around 8,850 stocks from 49 industrialized and emerging countries is an index that takes into account both developed countries and emerging countries as well as the respective small caps .
The MSCI World started on December 31, 1969 with a base value of 100 points. By January 11, 1973 it rose to 134.81 points.
During the 1973 oil crisis and 1974 global recession , the MSCI World fell 45.7 percent to its all-time low of 73.15 points, which it hit on December 10, 1974. After that, it rose by 577.9 percent to August 27, 1987 and ended trading at a new, preliminary high of 495.87 points.
On Monday, October 19, 1987, Black Monday occurred in the USA . The Dow Jones Industrial Average slumped 22.6 percent. The stock market crash quickly spread to all major international trading venues. By October 26, 1987, the MSCI World had fallen 23.7 percent to a level of 378.35 points.
In the following years the index marked numerous record highs. On January 10, 1989 it closed with 501.92 points for the first time above the 500 point mark and on February 10, 1998 with 1,000.83 points for the first time above the limit of 1,000 points. By March 27, 2000, the MSCI World rose to a new, preliminary high of 1,448.76 points. It had increased by 282.9 percent since October 26, 1987.
After the burst of the speculative bubble in the technology sector ( dot-com bubble ) and as a result of the September 11, 2001 attacks , the world index fell to 710.79 points by March 12, 2003. That was a decrease of 50.9 percent from the preliminary high in March 2000. From the spring of 2003, the MSCI World recovered.
On January 24, 2007, it ended trading with 1,505.98 points for the first time above the 1,500 point mark. After an increase of 136.7 percent compared to March 12, 2003, the MSCI World again marked a temporary high on October 31, 2007 with a closing level of 1,682.35 points.
In the course of the international financial crisis , which had its origin in the US real estate crisis in the summer of 2007, the index began to decline again. From the third quarter of 2008, the crisis increasingly affected the real economy. As a result, share prices collapsed worldwide. On October 9, 2008, the MSCI closed with 958.04 points, below the limit of 1,000 points. The index reached its lowest point on March 9, 2009, when it ended trading at 688.64 points. Since October 31, 2007, it had decreased by 59.1 percent. It was the biggest drop in MSCI World history.
From spring 2009 the index rose again, by April 29, 2011 by 101.6 percent to a closing level of 1,388.62 points. However, the weakening of the global economy and the worsening of the euro crisis from 2011 onwards led to a collapse in the price of the MSCI World. On October 4, 2011, the index ended trading at 1,074.50 points. The loss since the peak on April 29, 2011 was 22.6 percent.
The announcement of new bond purchase programs by the European Central Bank and the US Federal Reserve , which are basically unlimited, led to a recovery in prices on the stock market. The monetary stimulus played a bigger role in the price formation than the global economic slowdown and the state of the companies. From October 4, 2011 to February 12, 2020, the MSCI World rose 126.6 percent. It closed on February 12, 2020 at its all-time high of 2,434.95 points.
|High on a closing price basis||2,434.95||Wednesday February 12, 2020|
The table shows the milestones of the MSCI World since 1969.
The table shows the annual development of the MSCI World since 1969.
score in points
- MSCI (Ed.): Market classification . ( msci.com [accessed August 18, 2019]).
- MSCI WORLD INDEX (EUR) accessed from msci.com on May 10, 2020
- Julia Groth: South Korea wants to be an industrial state. In: Capital . June 7, 2016, accessed October 2, 2018 .
- Andrii Taranukha: Why South Korea Remains Classified As An Emerging Market. In: Frontera. October 20, 2016, accessed October 2, 2018 .
- MSCI WORLD SMALL CAP INDEX (USD) accessed from msci.com on August 18, 2019
- MSCI ACWI IMI INDEX (USD) accessed from msci.com on August 18, 2019.
- Spiegel Online: Buying government bonds: Investors cheer Draghi's euro promise , July 26, 2012
- Spiegel Online: ECB Council meeting: Draghi announces unlimited bond purchases , September 6, 2012
- Spiegel Online: Fed chief: Bernanke counts on the big flood of money , September 13, 2012
- Spiegel Online: Bond purchase: US Federal Reserve starts new economic program , December 12, 2012
- MSCI: Historical prices from 1969 , (MS Excel; 272 kB)
- Finanz.net: Historical prices from 2006