Key Takeaways
- Leading provider of global investment indices and analytics.
- MSCI indices benchmark over $16 trillion in assets.
- Offers ESG ratings and risk management tools.
- Popular indices include MSCI World and Emerging Markets.
What is MSCI Inc.?
MSCI Inc., originally known as Morgan Stanley Capital International, is a leading provider of investment indices, analytics, and risk management tools used worldwide. The company’s indices serve as key benchmarks for global equity markets, including developed and emerging economies.
Headquartered in New York City, MSCI supports asset managers and financial institutions by offering comprehensive data and ESG ratings, which are integral to modern portfolio construction and evaluation.
Key Characteristics
MSCI Inc. is defined by its extensive market coverage and innovative analytical solutions:
- Global Indices: Offers over 300,000 indices, including benchmarks like the MSCI World and MSCI Emerging Markets, widely used by investors worldwide.
- ESG Ratings: Provides Environmental, Social, and Governance scores that help you integrate sustainability into your investment decisions.
- Risk Analytics: Delivers tools to assess portfolio risk and performance, often incorporating metrics such as R-squared for statistical analysis.
- Market Influence: As of 2025, MSCI indices benchmark over $16.5 trillion in assets, highlighting their significance in global financial markets.
How It Works
MSCI constructs its indices using a float-adjusted market capitalization methodology, ensuring that only publicly available shares are counted. These indices are regularly reviewed and rebalanced to reflect market changes, enabling you to benchmark your portfolio accurately.
In addition to indexing, MSCI offers multifaceted analytics that support factor investing strategies, helping investors identify drivers of returns and risks. Their ESG ratings further provide insight into a company's sustainability profile, which can be critical for aligning investments with ethical goals.
Examples and Use Cases
MSCI indices are widely used by institutional and retail investors alike for benchmarking and passive investment strategies:
- Global Equity Exposure: ETFs tracking the MSCI World Index offer diversified access to developed markets including large companies like Apple.
- Emerging Markets: Investors seeking growth opportunities often use funds based on the MSCI Emerging Markets Index, which includes companies such as Taiwan Semiconductor.
- Low-Cost Indexing: You can combine MSCI benchmarks with strategies highlighted in our best low-cost index funds guide to build efficient portfolios.
Important Considerations
While MSCI indices provide broad market exposure and valuable analytics, it’s important to understand their construction and limitations. For example, index weighting can cause concentration risk in large-cap stocks, so consider diversification principles and factor investing approaches.
Additionally, ESG ratings from MSCI offer useful sustainability insights, but integrating these requires evaluating how they align with your investment objectives and risk tolerance.
Final Words
MSCI Inc. remains a cornerstone for global investment benchmarking and analytics, influencing trillions in assets worldwide. Keep an eye on its evolving ESG and climate finance products as demand for sustainable investing grows. Consider reviewing how MSCI’s indices align with your portfolio to optimize diversification and risk management.
Frequently Asked Questions
MSCI Inc., originally known as Morgan Stanley Capital International, is a leading American financial company that provides investment indices, analytics, and risk management tools for global markets. It is headquartered in New York City and serves asset managers, hedge funds, banks, and corporates worldwide.
MSCI offers several important indices, including the MSCI World, which tracks large- and mid-cap stocks in developed countries; the MSCI Emerging Markets, covering equities in emerging countries; and the MSCI ACWI, which combines developed and emerging markets for broad global coverage.
Investors use MSCI indices as benchmarks to gauge market performance, replicate them through ETFs and mutual funds, and gain diversified exposure to global stocks. For example, an ETF tracking the MSCI World index provides passive access to leading companies like Apple or Toyota without buying individual stocks.
MSCI provides Environmental, Social, and Governance (ESG) ratings and climate finance products that help investors integrate sustainability into their portfolios. These tools enable institutional investors to assess companies' ESG performance and manage risks related to social and environmental factors.
As of 2025, over $16.5 trillion in assets are benchmarked to MSCI indices globally. This reflects MSCI's dominant position as a provider of investment benchmarks used by numerous ETFs and funds.
MSCI began in 1968 as Capital International's indices for non-U.S. markets and was later licensed and branded by Morgan Stanley in 1986. It became independent through an IPO in 2007 after Morgan Stanley divested its stake by 2009, evolving into a global leader in financial indices and analytics.
MSCI serves a broad range of clients including asset managers, hedge funds, banks, insurers, and corporations. They provide these clients with data, analytics, and over 300,000 daily calculated indices to support investment decisions and risk management.
