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.

RELATED TERMS
  1. MSCI ACWI - All Country World Index

    The MSCI ACWI is a market capitalization weighted index designed ...
  2. The Morgan Stanley Capital International ...

    The Morgan Stanley Capital International All Country World Index ...
  3. MSCI Inc

    MSCI Inc is an investment research firm that provides indices, ...
  4. Dow Jones AIG Commodity Index (DJ-AIGCI)

    The Dow AIG Commodity Index (DJ-AIGCI), now called the Bloomberg ...
  5. Exempt Commodity

    An exempt commodity is any commodity other than an excluded or ...
  6. Commodity Research Bureau Index ...

    The Commodity Research Bureau (CRB) Index measures the overall ...
Related Articles
  1. Financial Advisor

    When Will it Be Safe to Buy Commodities?

    When will it be safe to buy commodities (and which ones)? A closer look at the commodities markets and how they move.
  2. Investing

    Commodity Funds 101

    These funds make investing in gold, oil or grain an easier prospect.
  3. Investing

    Commodities trading: An overview

    Trading commodities can seem challenging to a novice trader but we break it down for you. Learn more about the history of commodities, the types of commodities, and how to invest in them.
  4. Investing

    DBC: PowerShares DB Commodity Tracking ETF

    Find out about the PowerShares DB Commodity Tracking ETF, and explore a detailed analysis of the fund that tracks 14 distinct commodities using futures contracts.
  5. Investing

    Which Way Are Commodity Prices Headed In 2016?

    Commodity prices have been on a rollercoaster for the last four years due to global economic uncertainty. Will the trend continue or will their prices rise again?
  6. Investing

    The Countries Affected By Falling Commodity Prices

    Weaker Chinese demand is helping to drive down commodity prices, which has significant effects on the global economy.
  7. Investing

    The 3 Best ETFs to Short Commodities (DNO, SZO)

    Learn about the strategies of three inverse commodity ETFs, and discover why they offer an alternative method to bet on a decline in commodity prices.
  8. Investing

    How Commodity Pricing May Correlate to Inflation

    Commodity prices are believed to be a leading indicator of inflation. But, that may not alway ring true. Globalization contributes to changes in trends.
  9. Investing

    A-Shares Finally Earn MSCI Promotion

    China A-shares earned the coveted promotion to be included in MSCI's international benchmark.
RELATED FAQS
  1. Is it Possible to Invest in an Index?

    While you cannot buy indexes, which are just benchmarks, we'll show you three ways for you to mirror their performance. Read Answer >>
  2. How can electricity be traded as a commodity by an individual investor?

    Learn the characteristics unique to electricity trading as a commodity and how investors can trade electricity futures on ... Read Answer >>
  3. How is the value of the S&P 500 calculated?

    The S&P 500 is a U.S. market index that gives investors an idea of the overall movement in the U.S. equity market. The value ... Read Answer >>
  4. How do indexes determine which stocks are removed or added to them?

    Stock indexes are formed based on the kinds of stocks or financial securities they want to track. For example, the Standard ... Read Answer >>
Trading Center