What Is MSCI ACWI Ex-U.S.?

The Morgan Stanley Capital International All Country World Index Ex-U.S. (MSCI ACWI Ex-U.S.) is a market-capitalization-weighted index maintained by Morgan Stanley Capital International (MSCI). It is designed to provide a broad measure of stock performance throughout the world, with the exception of U.S.-based companies. The MSCI ACWI Ex-U.S. includes both developed and emerging markets.

Key Takeaways

  • The MSCI ACWI Ex-U.S. is a stock market index comprising of non-U.S. stocks from 22 developed markets and 26 emerging markets.
  • The MSCI ACWI Ex-U.S index is made up of 2,361 constituents, which is 85% of the global equity market aside from the U.S.
  • Sectors covered in the MSCI ACWI Ex-U.S index include health care, industry, finance, consumer staples, and information technology.
  • The MSCI ACWI Ex-U.S index is calculated with a methodology that focuses on liquidity, investability, and replicability.

The MSCI ACWI Ex-U.S. is one of 222,000 indexes provided by the MSCI.

Understanding MSCI ACWI Ex-U.S.

For investors who benchmark their U.S. and international stocks separately, the MSCI ACWI Ex-U.S index provides a way to monitor international exposure apart from U.S. investments. As of Dec. 31, 2020, the MSCI ACWI Ex-U.S. held mid and large-cap holdings across 22 out of 23 countries classified as developed markets and 27 classified as emerging markets.

The top 10 holdings of the MSCI ACWI Ex-U.S. as of Dec. 31, 2020, were as follows: {(index weight %) [Sector]}

  • Taiwan Semiconductor (1.84%) [Information technology]
  • Alibaba Group Holdings ADR (1.74%) [Consumer discretionary]
  • Tencent Holdings (1.65%) [Communication services]
  • Samsung Electronics Co. (1.41%) [Information technology]
  • Nestle (1.34%) [Consumer staples]
  • Roche Holdings (0.97%)[Healthcare]
  • Novartis (0.83%) [Healthcare]
  • ASML HLDG (0.82%) [Information technology]
  • LVHM Moet Hennessy (0.69%) [Consumer discretionary]
  • Toyota Motor Group (0.65%) [Automobile]

These holdings span the following nations with country weights of Japan (15.84%), China (12.18%), United Kingdom (8.78%), France (6.93%), Canada (6.31%), and Other (49.96%).

MSCI ACWI Ex-U.S. index sector weights include Financials (18.04%), Consumer Discretionary (13.79%), Information Technology (12.69%), Industrials (11.58%), Health Care (9.56%), Consumer Staples (8.93%), Materials (8.08%), Communication Services (7.06%), Energy (4.31%), Utilities (3.33%), and Real Estate (2.62%).

Calculating MSCI ACWI Ex-U.S.

The MSCI ACWI Ex-U.S. Index calculation is determined on the MSCI Global Investable Market Indexes (GIMI) methodology. This approach to index construction allows for global views and regional comparisons across all market capitalization size, sector, and style segments and combinations. The methodology focuses on index liquidity, investability, and replicability.

Portfolio managers review the index quarterly—in February, May, August, and November. The aim of each review is to reflect changes in the covered equity markets. Managers re-balance the index during the May and November reviews and re-calculate the large and mid-capitalization cutoff points.

The MSCI ACWI Ex-U.S. Index should not be confused with MSCI, the independent provider of institutional investor insights and tools. Existing outside of any financial institution, MSCI consists of 222,000+ equity indexes that are calculated daily. Notably, 1+ trillion in equity assets are benchmarked to MSCI indexes worldwide, while 99 of the top 100 global investment managers are clients of MSCI. MSCI’s leading equity indexes include the following: 

  • MSCI World
  • MSCI Emerging Markets
  • MSCI Europe

Article Sources

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