What Is the World Equity Benchmark Series?

The World Equity Benchmark Series is a type of international fund traded on the American Stock Exchange. The World Equity Benchmark Series follows the Morgan Stanley Capital International (MSCI) country indices. It was introduced in 1996 by Morgan Stanley and is a type of hybrid security that possesses qualities of both open-end and closed-end funds.

Understanding World Equity Benchmark Series (WEBS)

A closed-end fund is a fund formed as a publicly traded investment. These funds can raise a designated amount of capital with an initial public offering. The money collected goes into a fund that is then listed as a stock and traded on a public exchange. It is a specialized stock portfolio with a one-time fixed number of shares. An open-end fund is a conventional mutual fund, made up of a pool of money from many investors for investing in stocks and bonds. Investors share gains and losses in proportion to their investment in the fund.

An organization using a World Equity Benchmark Series owns each of the securities traded on the MSCI country indices. Ownership is in an approximate ratio to the initial capitalization or investment. A World Equity Benchmark Series can be bought, sold and traded like stocks.

Investors can use the World Equity Benchmark Series to achieve international diversification. The World Equity Benchmark Series is available for many different countries, including Australia, Austria, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, Malaysia, Mexico, the Netherlands, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The World Equity Benchmark Series follows reflects around 60% of the capitalization of a country's stock market. They are widely used by investors as benchmarks by which exchange-traded funds are bought and sold.

World Equity Benchmark Series and SPDRs

The World Equity Benchmark Series is similar to the SPDR series offered by Standard & Poor's. SPDR stands for Standard & Poor's depositary receipt, and it is an exchange-traded fund (ETF) managed by State Street Global Advisors that tracks the Standard & Poor's 500 index (S&P 500). Each share of an SPDR contains one-tenth of the S&P 500 index and trades at roughly at one-tenth the dollar-value level of the S&P 500. SPDRs can also refer to the general group of ETFs to which the Standard & Poor's depositary receipt belongs.

Investors can use SPDRs to realize broad diversification to specific portions of the market. For example, the SPDR S&P Dividend ETF is an investment vehicle that seeks to provide investment results that track the total return performance of the S&P High Yield Dividend Aristocrats Index. This means that the SPDR S&P Dividend ETF indexes dividend-paying stocks that are a part of the S&P 500. The ETF is made up of a total of 109 companies and tracks performance through its net asset value, which is communicated as a price per share.