Global sector indixes, Financial Management

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Global Sector Indixes

Morgan Stanley Capital International (MSCI) measures the International and National performance. It launched All Country Sectors on January 30, 2001. MSCI All Country Sectors offers immediate access to index levels, index returns, market caps, market weights and index valuation ratios and is available on either a monthly or daily basis. Its sectors include Developed Markets Sectors, Emerging Markets Sectors and Asia Pacific Sectors.

MSCI Indices

These indices are of prime importance for fund managers for better asset allocation and performance measurement. All these indices do not cover the total capitalization of the respective region. Since 1987, The Financial Times has published the FT-Actuaries World Index with the help of Goldman Sachs and WM company. Several national indices are provided along with the industrial and regional indices. The most important are World index, Europe index and Pacific index. The FT-Actuaries indices have a comprehensive coverage of 2400 stocks around the world, which cover 70% of each market's capitalization. Morgan Stanley Composite Index and FT-Actuaries indices are published daily and do not consider dividends. Other international indices are Salomon/Russel Global Equity Index, Union de Banque Suisses (UBS) and Dow Jones International Indices.

FTSE Global Sector Index Series

The FTSE Global Sector Index Series comprises 13 key global sector indices from the thirty-five sectors of the FTSE Global Classification System (GCS). Each Global Sector Index aims to represent between 80-90% of the full market capitalization of the eligible universe.

These highly tradable indices support a wide range of OTC (over-the-counter) products. They are ideal tools for sector-based investment and, in conjunction with the broader based FTSE All-World sector indices are employed by fund managers worldwide as a wide-ranging portfolio analysis tool. Domestic Sector Indices

In any national market, domestic investors prefer the national indices for judging the movements of the national stock markets. Most of these indices are broad-based covering companies from several industries with proper market value weightage. In these indices, each company is assigned a weight proportional to its market capitalization.

Market value indices are true market portfolio indices as they provide returns commensurate with the market movement. But this is not applicable to the equal weightage indices like Dow Jones or the Japanese Nikkei. The Dow Jones Industrial Average contains 30 stocks with the weights assigned in proportion to their market price. Local indices are preferable to the international indices due to the following reasons:

  • Most of the local indices have been used for several years.
  • Domestic indices represent a comprehensive coverage of the national listed stocks.
  • Local indices are readily available with the daily stock price.

 


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