Indices provider Morgan Stanley Capital International (MSCI) launches a global sector-based set of indices in mid-February. The new indices, MSCI All Country Sectors, combines 51 countries and 76 regions with 10 sectors, 23 industry groups and 59 industries.
The product was developed, according to MSCI, because of the trend towards sector investing, especially in Europe, which is increasingly seen as a single equity market since the EMU.
One of the biggest problems in creating the product was, says Baer Pettit, head of Europe at MSCI in London: "Re-classifying companies on a new standard and in a way the asset management industry would accept. The key question is how well this ties in with the way people look at the industry structures."
The sector indices will be adjusted to free float and an increased coverage of companies, when the proportion of companies within an industry in a given country will increase from 60% to 85% of the free float capital value. The changes will take place on November 30, 2001 and May 31, 2002.
There are three modules in the product – developed markets, emerging markets and Asia Pacific, with access to index levels and returns, market caps and weights, and index valuation ratios on a monthly or daily basis.