Camille Van Vyve
02 May 2023
What is the difference between MSCI World and MSCI AC World IMI indexes?
In this article, we will explore the differences between the MSCI World Index and the MSCI World IMI Index and how they can affect your investment decisions.
Introduction
Investors have a variety of investment options to choose from when it comes to the global stock market. Two of the most popular options are the MSCI World Index and the MSCI World Investable Market Index (IMI) Index. While both indexes aim to track the performance of the global stock market, there are some key differences between them. In this article, we will explore the differences between the MSCI World Index and the MSCI World IMI Index and how they can affect your investment decisions.
What is the MSCI World Index?
The MSCI World Index is a market capitalization-weighted index that tracks the performance of large and mid-cap stocks from 23 developed countries. The index was created in 1969 and covers approximately 85% of the free float-adjusted market capitalization in each country. The MSCI World Index is designed to be a broad representation of the global stock market, including companies in the Americas, Europe, and Asia-Pacific regions.
Characteristics of the MSCI World Index
- Market capitalization-weighted index
- Tracks large and mid-cap stocks from 23 developed countries
- Covers approximately 85% of the free float-adjusted market capitalization in each country
- Broad representation of the global stock market
What is the MSCI World IMI Index?
The MSCI World IMI Index is also a market capitalization-weighted index that tracks the performance of large, mid, and small-cap stocks from 23 developed countries. The index was launched in 2007 and includes all stocks in the MSCI World Index, as well as additional stocks from each country. The MSCI World IMI Index is designed to be a more comprehensive representation of the global stock market, including a wider range of companies in the Americas, Europe, and Asia-Pacific regions.
Characteristics of the MSCI World IMI Index
- Market capitalization-weighted index
- Tracks large, mid, and small-cap stocks from 23 developed countries
- Includes all stocks in the MSCI World Index, as well as additional stocks from each country
- More comprehensive representation of the global stock market
What are the Differences Between MSCI World Index and MSCI World IMI Index?
There are several key differences between the MSCI World Index and the MSCI World IMI Index, including:
Coverage
The MSCI World Index covers approximately 85% of the free float-adjusted market capitalization in each country, while the MSCI World IMI Index covers all stocks in the MSCI World Index, as well as additional stocks from each country. This means that the MSCI World IMI Index provides a more comprehensive representation of the global stock market.
Market Cap
The MSCI World Index tracks large and mid-cap stocks, while the MSCI World IMI Index tracks large, mid, and small-cap stocks. This means that the MSCI World IMI Index includes a wider range of companies, providing investors with exposure to smaller companies that may have higher growth potential.
Investability
The MSCI World Index includes stocks that are available to foreign investors, while the MSCI World IMI Index includes all stocks that are available to both foreign and domestic investors. This means that the MSCI World IMI Index provides a more comprehensive representation of the investable market.
Which One Should You Choose?
The MSCI World Index is often used by investors as a benchmark for global equity funds, while the MSCI World IMI Index is used as a benchmark for all-cap funds. Deciding whether to invest in the MSCI World Index or the MSCI World IMI Index depends on your investment goals and risk tolerance. If you are looking for broad exposure to the global stock market and prefer to invest in large and mid-cap companies, the MSCI World Index is the right choice. If you want exposure to small-cap companies in addition to large and mid-cap companies, you should follow the MSCI AC World IMI index.