WHAT IS MSCI All Country World Commodity Producers Sector Capped Index (MSCI AWC)
The Morgan Stanley Capital International All Country World Commodity Producers Sector Capped Index (MSCI AWC) is a market capitalization weighted index designed by Morgan Stanley to track the overall performance of commodity producers throughout the world. Stocks in this index are primarily focused on emerging market economies.
BREAKING DOWN MSCI All Country World Commodity Producers Sector Capped Index (MSCI AWC)
The main components of the Morgan Stanley Capital International All Country World Commodity Producers Sector Capped Index (MSCI AWC) are integrated oil and gas companies, fertilizer and agricultural chemicals, and diversified metals and mining. Using the Global Industry Classification Standard, or GICS, as a starting point, companies are selected to fit the three commodity producer sectors. Morgan Stanley is known for key indexes that define the markets where they trade. Another Morgan Stanley index is the MSCI All Country World Index, or ACWI, which is a market capitalization weighted index designed to provide a broad measure of equity-market performance throughout the world. The MSCI ACWI is maintained by Morgan Stanley Capital International (MSCI). Also, there is the Morgan Stanley Capital International All Country World Index Ex-U.S., or MSCI ACWI Ex-US, which is a market-capitalization-weighted index maintained by Morgan Stanley Capital International or MSCI. It is designed to provide a broad measure of stock performance throughout the world, with the exception of US-based companies.
Both indexes include developed and emerging market stocks.
Commodity indexes overview
A commodity index is an investment vehicle that tracks a basket of commodities to measure their price and investment return performance. They are traded on exchanges, allowing investors to gain easier investment access to commodities without having to enter the futures market. The value of these indexes fluctuates based on their underlying commodities, and this value can be traded on an exchange in much the same way as stock index futures.
A wide range of commodity indexes are available on the market, with varied components. Commodity indexes vary in the way they are weighted. Some indexes are equally weighted, meaning each commodity makes up the same percentage of the index. Other indexes have predetermined, fixed weighting that may invest a higher percentage in a specific commodity, such as energy-related commodities like coal and oil.
Some of the first commodity indexes were developed by the investment bank Goldman Sachs in the early 1990s, including its commodity index GSCI. Investing in commodity indexes gained in popularity in the early 2000s as the price of oil began to move out of its historic $20-30 per barrel price range and Chinese industrial production began to grow rapidly. Rising Chinese demand and limited global supply of commodities caused prices to rise, and investors sought a way to invest in the raw materials of industrial production, which commodity indexes provided.