what is msci 
msci is an acronym for morgan stanley capital international it is an investment research firm that provides stock indexes portfolio risk and performance analytics and governance tools to institutional investors and hedge funds msci is perhaps best known for its benchmark indexes including the msci emerging market index and msci frontier markets index the company continues to launch new indexes each year understanding mscicapital international introduced a number of stock indexes in 1965 to mirror the international markets the first global stock market indexes for markets outside the united states 1 when morgan stanley bought the licensing rights to capital s data in 1986 it began using the acronym msci 2in 2004 msci acquired barra a risk management and portfolio analytics firm for approximately 816 4 million 3 after the merger there was a spin off in an initial public offering ipo in 2007 and msci began trading on the new york stock exchange nyse under the stock ticker mxb 4 the firm became a fully independent stand alone public company from morgan stanley in 2009 5the firm provides its clients with investment tools including those from barra and riskmetrics it also publishes indexes that are widely available to the investing public 6msci indexesmsci is perhaps best known for its stock indexes which focus on different geographic areas and stock types such as small caps mid caps and large caps they track the performance of the stocks that are included in them and act as a base for exchange traded funds etfs as of dec 31 2023 there were 15 6 trillion in assets under management aum benchmarked to the firm s indexes msci offers more than 280 000 indexes 7 some of the most widely used are the emerging markets index frontier markets index all country world index and eafe index launched in 1988 this index lists constituents from 24 emerging economies including china egypt india korea thailand brazil south africa and mexico 8 it compiles the market capitalization of all the companies that are listed on these countries stock exchanges the emerging markets index is considered a good way to track the performance and growth of emerging markets emerging markets offer investors growth potential as their economies expand as well as creating risk diversification for global investors the frontier market index is used to track markets in countries that are considered more volatile and unpredictable than emerging markets this index focuses on 28 markets from the middle east africa south america and europe some of the frontier regions with stocks included in this index are vietnam morocco iceland romania and bahrain 9frontier markets can be profitable for investors since they have plenty of room for growth however they are not heavily traded which can make them difficult to sell if a country s economy takes a downturn due to global or local changes this is the firm s flagship global equity index which tracks the performance of small to large cap stocks from 23 developed and 24 emerging markets the more than 2 800 stocks represented are for companies that have a global presence it covers about 85 of the market capitalization in each market that it includes 10the acwi is often used as a way to represent the global stock market eafe is an abbreviation for europe australasia and the far east this lists 766 stocks from 21 developed market countries excluding canada and the united states it covers approximately 85 of the market capitalization in each of the countries it includes 11eafe countries are considered highly stable they are widely traded making it easy to both buy and sell even in times of economic trouble index reviews and weightingsthe msci indexes are market cap weighted indexes which means stocks are weighted according to their market capitalization calculated as stock price multiplied by the total number of shares outstanding 12 the stock with the largest market capitalization gets the highest weighting on the index this reflects the fact that large cap companies have a bigger impact on an economy than mid or small cap companies a percent change in the price of the large cap stocks in an msci index will lead to a bigger movement in the index than a change in the price of a small cap company each index in the msci family is reviewed quarterly and rebalanced twice a year 13 stocks are added or removed from an index by analysts within msci to ensure that the index still acts as an effective equity benchmark for the market it represents 