Float DataProductCapturing theFull Investment
Universe

Float Data ProductCapturing the FullInvestment Universe

Capturing the FullInvestment Universe
In March 2023, MSCI launched the Float Data Product which provides
additional transparency to metrics associated with free float market
capitalization at a security level.
This extensive data set is updated monthly and includes all securities within
the MSCI equity universe (>34,000).
Let’s learn more about this product, the data it covers and how it can help
investors better understand the markets they operate in.
All data is as of April 30, 2023.

2

Float Data ProductCapturing the Full
Investment Universe

03

Universe
MSCI’s equity universe covers a wide range oflisted security types1:
listed equity securities
REITs and some income trusts in Canada
Certain types of USA listed limited
partnerships, limited liability companies, andbusiness trusts

EMEA

6,881 securities

Preferred shares determined by MSCI to exhibit
characteristics of listed equity securities.

Americas6,204 securities

It will include IPOs but it will not include mutual
funds or ETFs. Most investment trusts are also
excluded.

APAC

21,825 securities

Developed markets: 16,322 securities
Emerging markets: 17,319 securities
Frontier markets: 1,027 securities
Standalone markets: 242 securities
Source: MSCI, data as of April 30, 2023

1 Please refer to the MSCI Global Investable Market Indexes (GIMI) Methodology for more details.

Float Data ProductCapturing the Full
Investment Universe

04

Market Capitalization
In terms of market capitalization, securities from developed markets tend to be larger thansecurities in emerging or frontier markets. However, in the Asia Pacific region (APAC), the averagesecurity size is larger in emerging markets, as securities in China, India and Taiwan are on averagelarger than securities in all five APAC developed markets (Australia, Hong Kong, Japan, New
Zealand, and Singapore).

That said, emerging markets have a long tail of smaller securities. The chart below looks at the numberof securities per market cap buckets2 (defined as a market capitalization ranges).

Average Market Capitalization

Number of Securities By Company Market Cap Size Buckets
Developed Markets

Emerging Markets

Frontier Markets

14,000

7,000

12,000

6,000

10,000

8,000

6,000

4,0003,000

2,000

2,000

1,000

00EMEA

Source: MSCI, data as of April 30, 2023
2 Illustrative ranges for the purposes of this analysis. Please note that they do not reflect MSCI standard segment definitions.

APAC

Emerging Markets

5,000

4,000

Americas

Developed Markets

8,000

Number of Securities

Average Market Capitalisation ($m)

16,000Mega Caps (>$28bn)
Source: MSCI, data as of April 30, 2023

Large Caps (between>$8bn and <$28bn)

Mid Caps (between>$700m and <$8bn)

Small Caps (between>$100m and <$700m)

Micro Caps (<$100m)

Float Data ProductCapturing the Full
Investment Universe

05

Free Float
The Free Float3 for any of the securities in the MSCI equity universe is defined as the proportion ofshares outstanding that is deemed to be available for purchase in the public equity markets byinstitutional investors.

From a distribution perspective, the comparison between developed and emerging markets does
provide some interesting results. In developed markets, more than 65% of securities have a free float
higher than 50%, while in emerging markets that number is just over 40%.

Looking through our universe, free float tends to be higher in developed markets and as companies grow.

Average Free Float by Market
Types

Average Free Float by Market
Caps Bucket

Free Float Distribution
100%

20%

40%

Developed
Markets
Emerging
Markets

60%

80%

100%

63.4%

46.6%

0%

Standalone
Markets

44.5%

47.8%

20%

40%

64.8%

Large

Small
Micro

60%

76.7%

MegaMid
Frontier
Markets

10%

54.2%
51.0%
55.2%

80%

100%

11.5%

90%
% of Securrities by Free Float Buckets

0%

80%

25% - 50%

39.3%
29.6%

70%

50% - 75%
75% - 100%

60%
50%

26.4%

40%

41.8%

30%
20%

26.2%

10%Source: MSCI, data as of April 30, 2023

0% - 25%0%

8.1%
Developed Markets

17.2%
Emerging Markets

Source: MSCI, data as of April 30, 2023

If we look a bit deeper, in the USA over 68% of securities have a free float greater than 75%, while inChina only around 8% companies have a free float greater than 75%. In India, this number is even lower(closer to 6%).
3 Please refer to the MSCI Free Float Data Methodology for more details.

Float Data ProductCapturing the Full
Investment Universe06

Foreign Ownership Limits
and Foreign RoomTraditionally, investors associate foreign ownership limits4 with emerging and frontier markets.
While this is broadly true, there are some sectors that in developed markets are considered ofnational importance, and as such, will impose limits on the ownership by foreign investors.
Developedmarkets

Emergingmarkets

Frontier markets

Standalone markets

No foreign ownership limits

99.3%

48.9%

86.9%

92.1%

Some degree of foreign
ownership limits

0.7%

51.1%

13.1%

7.9%

Source: MSCI, data as of April 30, 2023

For example, in the EU, foreign investment cannot exceed 49% of ownership of a publicly listed EUairline. Canada has a similar restriction, and they also have restrictions for foreign ownership for media
and broadcasting companies. The table on the right combines the Float Data Product with the Global
Industry Classification Standard (GICS®5) and shows, for developed and emerging markets, thepercentage of securities per GICS sector that has a limit on foreign ownership.

GICS Sector

Developed Markets

Emerging Markets

Communication Services

3.0%

44.5%

Consumer Discretionary

0.2%

44.1%

—

43.0%

0.4%

43.6%

Financials

—

36.1%

Health Care—

57.3%

Industrials

1.4%

61.5%

—

57.2%

Materials

0.1%

56.6%

Real Estate

2.8%

31.8%

—

43.5%

Consumer Staples
EnergyInformation TechnologyUtilities
Source: MSCI, data as of April 30, 2023

The lower the value of a foreign ownership limit for a security, the less amount of capital will beavailable for foreign investors. This has an impact on the potential opportunity set for investors and isan input we consider in our index construction. We also include in this product a metric called ForeignRoom. Foreign Room is the proportion of shares of a security still available for investment by foreign
investors and it may vary over time6.

4 Foreign ownership limit: security foreign ownership restriction as stipulated by regulatory authority overseeing that market.
5 GICS® is the Global Industry Classification Standard jointly developed by MSCI Inc. and S&P Global.
6 Please refer to the MSCI Free Float Data Methodology for more details.

Float Data ProductCapturing the Full
Investment Universe

07

Comparing
MSCI Indexes
The MSCI equity universe is the starting point for all MSCI indexes, starting with the market cap
indexes as defined by MSCI’s Global Investable Market Indexes (GIMI) methodology.
The broadest MSCI equity index is the MSCI ACWI (All Country World Index) + Frontier Markets IMI(Investable Markets Index). It covers developed, emerging and frontier markets, across all main size
segments (large, mid, and small caps) which include more than 9,000 securities as of April 30, 2023.
Standalone markets are only covered in market specific indexes and are not included in regional
indexes.
This section compares the MSCI equity universe and the MSCI ACWI + Frontier Markets IMI acrossseveral dimensions.

From a sector weights perspective, MSCI’s broadest index is designed to represent the performance ofthe MSCI equity universe. However, when we look at region and market type, we can see some starkdifferences. Developed markets and the Americas take a larger weight of the index compared to theuniverse based on April 2023 data.
Index rules linked to investability play an important role in explaining these differences. While theuniverse is agnostic about potential investors, MSCI considers the views and practical implementation
challenges of the international investment community in the construction of its MSCI Global Investable
Market Indexes.
MSCI Equity Universe Weights

MSCI ACWI + Frontier Markets IMI Weights

MSCI Equity Universe Weights

MSCI ACWI + Frontier Markets IMI Weights

Developed Markets

66.1%

88.9%

Communication Services

8.5%

6.9%

Emerging Markets

33.4%

10.9%

Consumer Discretionary

11.7%

11.1%

Frontier Markets

0.4%

0.2%

Consumer Staples

7.5%

7.3%

Standalone Markets

0.1%--Energy

6.4%

5.0%

Source: MSCI, data as of April 30, 2023

Financials

15.7%

14.0%

Health Care

10.3%12.3%

MSCI Equity Universe Weights

MSCI ACWI + Frontier Markets IMI Weights

Industrials

10.4%

11.1%

Americas

45.9%

63.3%

Information Technology

18.3%

20.9%

EMEA

19.4%

19.0%

Materials

5.9%

5.2%

APAC

34.8%

17.8%

Real Estate

2.4%

3.1%

Utilities

2.9%

3.0%

Source: MSCI, data as of April 30, 2023

Source: MSCI, data as of April 30, 2023

Float Data ProductCapturing the Full
Investment Universe

Conclusion
The MSCI Float Data Product is a new offering which aims to help
investors better understand the equity universe that supports ourindexes. By including data on free float, foreign ownership limits andforeign room, it gives investors more granular information on theinvestability of securities in that broader universe.

08Contact us
AMERICAS

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