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MSCI Launches Index Enhancements
At the end of November, MSCI made the first part of a long-planned and significant change to the methodology for its benchmark MSCI Global Index series, including the popular MSCI EAFE and MSCI Emerging Markets indexes. The ''Standard'' indexes will now cover only large- and mid-cap stocks, but will offer more comprehensive coverage of that space; in the past, they covered a smattering of small-cap stocks as well but had less complete coverage of the large and mid-cap markets.
MSCI also launched a separate and comprehensive Small Cap index series, which will be distinct from the Standard series. Net-net, the new MSCI indexes will cover 99 percent of the world's market cap, compared with just 85 percent before the change.
To minimize the potential market impact, MSCI is making the transition in two rounds: Half the market cap moved on November 30, 2007, and half will move on May 30, 2008.
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