A New World. A New Benchmark.
Institutional investors have been increasingly looking for broader and deeper exposure to international equities. Thought leaders in the industry have also questioned the merit of the common strategic equity allocation split between domestic and international equities. Many now believe that this approach, built on the historic notion of segmented economies, high levels of foreign investment restrictions, and heavily domestically-focused companies, comes with important market timing risks and opportunity costs.
A number of large and leading pension plans are now considering 'Global Equity' as a single strategic asset class. Consultants are more frequently recommending a global equity policy benchmark as the starting point for asset allocation. Both these developments reflect an evolution in the investment process as institutional investors increasingly look to capture the global equity investable opportunity set and eliminate any home-bias.
A more integrated approach to equity investing may be the next step, and a natural consequence of globalization. A broad and investable global equity benchmark, such as the MSCI All Country World Investable Market Index (ACWI IMI), is an integral part of such a process. MSCI ACWI IMI, part of the MSCI Global Investable Market Indices (GIMI) family, covers approximately 8,500 securities across size, style and sector segments in 45 Developed and Emerging Markets.
By capturing the global equity investment opportunity set, MSCI ACWI IMI can be used as a broad and investable global equity benchmark for
- Asset Allocation - By providing a more accurate representation of the global equity markets, MSCI ACWI IMI can assist with asset allocation decisions by helping to: capture the full spectrum of diversification opportunities; identify implied bets; and quantify any home bias in your equity allocation.
- Performance Measurement and Attribution - Several plan sponsors and consultants use MSCI ACWI IMI as the benchmark for global mandates. Regional subsets of MSCI ACWI IMI, such as MSCI EAFE IMI or MSCI Emerging Markets (EM) IMI, are used for more specialized investment mandates
For more information on MSCI ACWI IMI, please contact us.
