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Emerging Markets Index (MSCI)

Updated on October 1, 2022 , 89 views

The MSCI Emerging Markets Index fund helps in measuring the financial stability of leading companies in rapidly-emerging countries of the world. It is a leading index that has been created by the MSCI Inc. -former Morgan Stanley Capital International.

Emerging Markets Index

Investors in America who wish to invest into global stocks can consider buying shares of the ETFs (Exchange-traded Fund) for mirroring the MSCI index. There are several Mutual Funds and ETFs that leverage MSCI Emerging Markets Index chart as the standard for their performances.

Calculating MSCI Index

The MSCI indexes are available as Market-cap & weighted indexes. This implies that stocks are weighted as per the respective market capitalization.

MSCI Index is calculated as:

MSCI Index = Stock Price X Total Shares Outstanding

The stocks featuring the highest value for market capitalization receive the highest weighting on the given index.

Understanding MSCI Emerging Markets Index Fund

The MSCI Emerging Markets Index chart is helpful in reflecting the overall performance of both medium-cap as well as large-cap companies in as many as 27 nations. All of these nations are described as emerging markets. This implies that their sectors or economies are rapidly rising with respect to the global markets.

The MSCI Emerging Marketing Index came into existence in the year 1988. In the modern era, the index is extensively used for measuring the overall economic performance of companies belonging to emerging markets. The index is also utilized by MSCI Emerging Markets Index ETFs as well as mutual funds as the standard.

MSCI features several indexes for tracking global stocks featuring the MSCI World Index. It is responsible for tracking the stocks of nations that are developed. It also features the MSCI All-Country World Index. It is responsible for tracking a wide series of stocks across emerging as well as developed nations.

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Investments in MSCI Emerging Markets Index

Investors can consider buying shares in mutual funds or funds that are exchange-traded for buying stocks that are listed in the given index. The iShares MSCI EEM (Emerging Markets Index ETF) is known to invest around 90 percent of the total assets in receipts of the American Depositary and stocks as included in the given index.

There are several choices of emerging market mutual funds and emerging market ETFs for tracking other indexes. These include the FTSI Emerging Markets Index. These feature mutual funds not mirroring any index but implementing their own stock-selection.

Emerging markets are regarded as a risky investment. This is because of the overall fluctuations in currency exchange and political risks. Investors turning to emerging markets can look forward to experiencing volatile returns. The overall gains can be significant. At the same time, there are also potential losses.

Conclusion

The MSCI indexes are market cap indexes analyzing the performance of the stock markets in specific areas. They play a vital role in the global market.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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