India’s rapid rise in global equity indices continues to capture the attention of investors worldwide. As of 31st August 2024, India has claimed the 6th position in the Morgan Stanley Capital International (MSCI) All Country World Investable Market Index (ACWI IMI), surpassing China for the first time in history.
Here’s a detailed look at the key points shaping this significant development:
Click Here: Top 9 Countries in MSCI ACWI IMI
Understanding the MSCI ACWI IMI and EM IMI
The MSCI ACWI IMI and EM IMI are two critical global equity indices developed by MSCI Inc., a leading financial services company based in the USA. These indices track the performance of large, mid, and small-cap stocks globally and within emerging markets.
- MSCI ACWI IMI: A global index that monitors capital performance worldwide, encompassing a more inclusive selection than the broadly followed MSCI ACWI index.
- MSCI EM IMI: Represents 85% of the free-float adjusted market capitalization in each included emerging market country, making it a powerful benchmark for emerging markets.
Key Highlights
- India Ranks 6th in MSCI ACWI IMI: India now holds a 2.35% weight in MSCI ACWI IMI, a global equity index. It marginally trails France, which has a 2.38% weight, and outpaced China’s 2.24%.
- Top Emerging Market: India has also secured the top spot in the MSCI Emerging Markets Investable Market Index (EM IMI), with a 22.7% weight, surpassing China’s 21.58%. This marks a historic moment for India in the emerging markets landscape.
India’s Growth Amidst Stagnating China
While India shines in the MSCI ACWI IMI and MSCI EM IMI rankings, the country still lags behind China in the broader MSCI ACWI index, with a 2.07% weight compared to China’s 2.41% (as of September 2024). However, India’s momentum in the equity markets shows no signs of slowing down.
MSCI Weights as of 31st August 2024:
- India (MSCI ACWI IMI): 2.35%
- China (MSCI ACWI IMI): 2.24%
- India (MSCI EM IMI): 22.7%
- China (MSCI EM IMI): 21.58%
Factors Driving India’s Surge in MSCI ACWI IMI
Several factors have contributed to India’s remarkable rise in the MSCI ACWI IMI and EM IMI indices, including:
- Robust Economic Fundamentals: India’s consistent GDP growth, which is currently three times faster than China, is a driving force behind this surge.
- Foreign Direct Investment (FDI): A 47% increase in FDI inflows in early 2024 has further strengthened India’s capital markets.
- Favorable Market Conditions: A decline in Brent crude oil prices and substantial Foreign Portfolio Investment (FPI) in Indian debt markets have bolstered the economy.
- Strong Equity Market Performance: India’s stock market has shown broad-based growth across large-cap, mid-cap, and small-cap indices, offering diverse investment opportunities.
India vs. China: Equity Market Performance
- India’s Stock Market Performance: India’s Nifty index delivered a 15% return in USD terms in 2024, outperforming the MSCI EM index, which grew by 7%.
- China’s Decline: Chinese equities, on the other hand, have witnessed a 10% decline in the same period, showcasing a stark contrast in the two countries’ market trajectories.
Global Rankings in MSCI ACWI IMI
Despite India’s rise, the United States remains the dominant player in the MSCI ACWI IMI, with a significant lead over other countries. The top five countries in the MSCI ACWI IMI index include:
- United States – 63.23%
- Japan – 5.73%
- United Kingdom – 3.51%
- Canada – 2.83%
- France – 2.38%
India, now in the 6th position, is edging closer to France with its 2.35% weight. Other notable countries in the top 10 include Switzerland, Taiwan, and Germany.
Future Outlook for India in Global Markets
India’s upward trajectory in global markets is expected to continue, although analysts caution that the rise in the MSCI ACWI IMI may not significantly boost passive inflows. Exchange-Traded Funds (ETFs) tracking this index manage moderate assets of less than USD 2 billion, limiting the immediate financial impact. However, India’s consistent growth in nominal GDP and operating earnings shows strong potential for future gains.
Conclusion
India’s rise in the MSCI ACWI IMI and MSCI EM IMI indices reflects the country’s robust economic health, attracting increased attention from global investors. While India has surpassed China in the emerging markets space, challenges remain in further increasing its share in the MSCI ACWI index. Yet, with its fast-paced GDP growth, positive FDI trends, and improving stock market, India’s future in global equity indices looks promising.
FAQs
What is the MSCI ACWI IMI index?
The MSCI ACWI IMI (All Country World Index Investable Market Index) is a global equity index that includes large, mid, and small-cap companies across 23 developed and 27 emerging market countries. It offers comprehensive coverage of 99% of the global equity investment opportunities.
What is IMI in MSCI?
IMI stands for “Investable Market Index.” It represents a more extensive index that includes large, mid, and small-cap stocks, offering broader market coverage compared to standard indices that typically include only large and mid-cap stocks.
What does MSCI ACWI stand for?
MSCI ACWI stands for “Morgan Stanley Capital International All Country World Index.” It represents a global equity index that includes both developed and emerging markets but typically focuses only on large and mid-cap stocks.
What is MSCI USA IMI?
The MSCI USA IMI is an index that captures the performance of large, mid, and small-cap companies within the United States, representing around 99% of the total U.S. equity market.
What does IMI mean index?
IMI means “Investable Market Index,” which refers to an index designed to capture a comprehensive range of large, mid, and small-cap stocks within a given market or across multiple markets.
What countries are in the MSCI IMI?
The MSCI ACWI IMI covers 23 developed market countries and 27 emerging market countries. These include countries like the United States, Canada, Japan, Germany, China, India, and Brazil, among others.
What is the difference between S&P 500 and MSCI ACWI?
The S&P 500 represents the 500 largest publicly traded companies in the United States, covering only the U.S. market. In contrast, the MSCI ACWI is a global index that includes large and mid-cap stocks from 23 developed and 27 emerging markets worldwide, providing much broader international exposure.
What is MSCI Emerging Markets IMI index?
The MSCI Emerging Markets IMI index captures the performance of large, mid, and small-cap companies across 27 emerging market countries, offering a more comprehensive view of the investment opportunities in emerging markets.
What is the difference between MSCI World Index and ACWI?
The MSCI World Index covers only developed market countries, while the MSCI ACWI (All Country World Index) includes both developed and emerging market countries, making it a more inclusive global index.
What is the MSCI ACWI IMI Plastics Transition index?
The MSCI ACWI IMI Plastics Transition Index is a thematic index that focuses on companies involved in the plastics transition, targeting businesses that are taking steps to manage their exposure to plastic waste and pollution in alignment with global sustainability goals.
MSCI ACWI IMI price
The MSCI ACWI IMI price refers to the current value or price level of the index. You can find the most recent price by checking financial platforms or MSCI’s official website.
MSCI ACWI IMI ETF
The MSCI ACWI IMI ETF is an exchange-traded fund that aims to replicate the performance of the MSCI ACWI IMI Index, allowing investors to gain broad exposure to global equities.
MSCI ACWI IMI chart
The MSCI ACWI IMI chart provides a graphical representation of the index’s performance over time. You can find the chart on financial websites like Bloomberg, Yahoo Finance, or MSCI’s official site.
MSCI ACWI IMI index
The MSCI ACWI IMI index is a comprehensive global equity index covering large, mid, and small-cap companies across both developed and emerging markets.
MSCI ACWI IMI vs MSCI ACWI
The MSCI ACWI IMI includes large, mid, and small-cap companies, providing a more comprehensive market view. In contrast, the MSCI ACWI includes only large and mid-cap companies.
MSCI ACWI IMI net
The “net” refers to the MSCI ACWI IMI’s net return index, which accounts for the impact of taxes on dividends in the performance calculations.
MSCI ACWI IMI vs MSCI World
The MSCI ACWI IMI includes stocks from both developed and emerging markets, while the MSCI World Index covers only developed market countries. Also, the IMI version covers large, mid, and small-cap stocks, while MSCI World typically focuses on large and mid-caps.
MSCI ACWI IMI performance
The MSCI ACWI IMI performance reflects how the index has performed over a specific period. You can track its historical and recent performance through financial platforms or MSCI’s website.