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MSCI Indices show substantial advances in global equities, except Emerging Markets

Friday, December 27, 2013
Opalesque Industry Update - MSCI Inc., a provider of investment decision support tools worldwide, today published the year-to-date (YTD) 2013 performance of its MSCI Indices, displaying substantial advances in global equity markets, with the exception of Emerging Markets.

The flagship MSCI global index, MSCI ACWI IMI—comprised of over 8,500 large, mid and small cap securities across 23 Developed and 21 Emerging Markets countries—showed healthy double digit returns, delivering a 2013 YTD return of 19.58%, following its 2012 gain of 13.70%.

As in 2012, the MSCI ACWI Small Cap Index bested all other MSCI ACWI index capitalization segments for 2013 YTD, with a return of 25.09% versus returns of 20.76% and 18.37% over the period for the MSCI ACWI Mid Cap and Large Cap Indices, respectively.

Among global sectors, the top performers for 2013 YTD were the MSCI ACWI IMI/Healthcare and the MSCI ACWI IMI/Consumer Discretionary Indices, which returned 32.83% and 32.74%, respectively. The single sector index with negative performance was the MSCI ACWI IMI/Materials Index, which returned ‑3.36% for the period.

Developed Markets

A wide range of regional and country MSCI Developed Markets (DM) Indices delivered strong positive returns in the double digits for 2013 YTD. The MSCI World Index, for example, posted a return of 22.50%, while the top performing regional index, the MSCI North America Index, returned 26.56%. The highest DM country performers included the MSCI Finland, Ireland and USA Indices, with returns of 38.99%, 36.73% and 28.79%, respectively.

The MSCI DM Small Cap Indices handily outperformed their mid and large cap counterparts across the majority of countries and regions for 2013 YTD. The MSCI USA Small Cap Index was the top performer, for example, with a 2013 YTD return of 35.74%, while the MSCI World Small Cap Index produced a return of 28.80% over the period, which was 28% higher than that of the MSCI World Index.

Frontier Markets

The MSCI Frontier Markets (FM) Indices produced widely dispersed 2013 YTD results, with the majority of regions and countries in positive territory. The MSCI Frontier Markets Index returned 20.53% over the period, closely followed by the MSCI Frontier Markets 100 Index, which returned 20.37%. The MSCI Frontier Markets Africa Index was the top-performing regional FM index, delivering a return of 23.49% for the period. The top three single country FM index performers for 2013 YTD included the MSCI Bulgaria, UAE and Argentina Indices, which returned 91.55%, 79.02%, and 68.97%, respectively. The lowest performing FM countries were the MSCI Tunisia and Ukraine Indices with 2013 YTD returns of ‑12.44%, and -18.52%, respectively.

Emerging Markets

A majority of the regional and country MSCI Emerging Markets (EM) Indices posted negative 2013 YTD returns. The MSCI Emerging Markets Index lost -5.67% over the period—and this figure was slightly higher than the average return across the EM constituent regions and countries. Four EM countries did show positive returns in the low single digits, including the MSCI Egypt Index, which posted a 7.17% return for the period, and the MSCITaiwan, Korea, and Malaysia Indices, which returned 3.78%, 2.51%, and 2.09%, respectively. One EM outlier was the MSCI Greece Index, which migrated from the developed markets to the emerging markets in November 2013 and posted a return of 37.88%.

The MSCI China Index[2], which comprises approximately 20% of the MSCI Emerging Markets Index, delivered a slightly negative return of -0,20%; the domestic MSCI China A Index[3] delivered a slightly lower return of -2.53%. The top performing EM region was the MSCI Emerging Markets Far East Index, which returned 0.57% over the period.

Reinforcing the global trend of small cap dominance, the MSCI EM Small Cap Index outperformed its large- and mid-cap sibling (the MSCI EM Index), returning -2.07% for 2013 YTD.

Factor Indices

Relative to their market cap weighted parent indices, the suite of MSCI Factor Indices performed variously in different markets. For example, against the backdrop of significant upward trends in the regions and countries of the developed markets, the MSCI Momentum Indices handily outperformed their parent indices over the YTD 2013 period in these DM markets. Similarly, MSCI Value Weighted and Quality Indices generally showed modest outperformance relative to their parents in the developed markets. The MSCI Minimum Volatility Indices, on the other hand, generally underperformed their parents in developed markets and outperformed their parents in emerging markets, which showed substantially negative 2013 YTD performance.

Historical index levels for the full range of MSCI Indices are available at www.msci.com

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