MSCI Indexes

Bringing
the World
into Focus
Economic development around the world had led investors
to consider broadening their investment exposures.
But with a global universe of nearly 34,000 securities, where should
investors start? MSCI’s indexes, which are based on a disciplined
approach, can help map and categorize the stock market so thatinvestors can make better investment decisions.

Defining
the Global Universe
To construct a robust representation of the world’s equity market, MSCI begins byidentifying eligible securities from public stock markets.

Identifying eligible equity securities
Eligible
Ordinary and some
preferred shares

Share equivalents,
such as American depository receipts (ADRs)

Mutual funds

ETFs

Real estate
investment trusts (REITs)

Not Eligible
Equity derivatives
such as options and futures contracts

Applying
Investability
Screenshares
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Next, the universe of eligible securities isscreened according to three requirements.

Shares must be investable

MSCI analyzes two different size metrics — free-float
market cap and full market cap— to make an assessmentof the share capital available for investors.

2Shares must be accessible tointernational investors
A minimum threshold is set for a security’s foreign inclusion factor(FIF) to ensure that investors from all regions can access these securities.

The FIF of a security is the proportion of shares outstandingthat is publicly available for purchase by international investors.

3Shares must be sufficiently tradeable
Securities must demonstrate sufficient liquidity so that every MSCI index can be
the basis of financial products, in addition to other applications. MSCI uses two
metrics to determine how liquid a stock is:

3 month frequencyof trading (FOT):

12 and 3 month annual
traded value ratio (ATVR):

This metric gives MSCI insight
into any disruptions in asecurity’s tradingThis metric helps MSCI identify
stocks that have stable longand short-term liquidity

After screening the global universe, what’s left is aninvestable representation of the global market.

Classifying
Companies
MSCI classifies every company in the global investable universe into three
non-overlapping categories.
This allows MSCI to create indexes that cover specific countries, regions andsectors, in addition to indexes that focus on larger or smaller companies.

Country
A company and its securities can only be classified in one country.
MSCI's criteria includes:

Country ofIncorporation

Location ofPrimary Listing

Geographic Distribution of theCompany’s Shareholder BaseCompanyHistory

SizeSector

A company can only be assigned toone size segment. These are:

A company is assigned to the one sector that best describes its businessactivities. This is selected from the Global Industry Classification Standard(GICS ®)* that MSCI co-developed.
GICS
consists of:Large CapMid Cap

11 Sectors

25 Industry Groups

Small Cap

Micro Cap

74 Industries

163 Sub-Industries*GICS, the global industry classification standard jointly developed by MSCI and Standard & Poor’s.

This approach enables investors to better understand the investable universe and shape their asset
allocation views and insights. This deeper understanding can be used to shape and refine
investment decisions.

For over 50 years, MSCI
indexes have provided:

Extensive coverage of theglobal investable universe

Strong emphasis on
investability and replicability

Clear segmentation that seeks
no gaps or overlap

Like the needs of investors, the world’s equity universe is constantly changing.
MSCI’s index methodology follows a transparent and objective process, giving
investors the tools they need to shape and refine their investment allocations.

Powering better investments for a better world. msci.com

As of March 30, 2023

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