Category: Emerging Markets

The Regional Breakdown of Stock Market Sectors Over Time



The following content is sponsored by MSCI

Regional Breakdown of Stock Market Sectors

A Regional Breakdown of Stock Market Sectors

Over the last decade, the composition of global stock market sectors has changed substantially. For example, the information technology sector’s weighting has nearly doubled while the energy sector’s weighting has shrunk by nearly three-quarters.

But which regions have gained or lost market share within the stock market sectors? In this graphic from MSCI, we show the regional breakdown of each sector in 2011 and 2021.

Regional Weights by Stock Market Sector

We’ve based our data on the MSCI ACWI Investable Market Index (IMI), a global equity index intended to represent the entire stock market.

Here is how regional weights by stock market sectors have changed in percentage point terms over the last decade. For example, emerging markets’ utility weighting shrunk from 0.5% to 0.3% of the global stock market, a decline of 0.2 percentage points.

 Emerging
Markets
North
America
Asia
Pacific
Europe, Middle East,
and Africa
Total
Utilities-0.2-0.1-0.3-0.5-1.0
Communication Services0.34.90.1-0.84.5
Materials-0.9-1.0-0.9-1.2-4.0
Industrials-0.40.7-0.6-0.3-0.7
Consumer Discretionary0.72.0-0.6-0.41.6
Consumer Staples-0.3-0.9-0.3-1.0-2.4
Health Care0.42.90.2-0.33.2
Financials-1.1-0.5-2.1-2.4-6.1
Information Technology0.88.2-0.20.79.5
Energy-1.2-4.8-0.3-2.0-8.2
Real Estate0.32.10.70.53.5

Financials shrunk the most in the (Read more...) Pacific region and Europe, Middle East, (Read more...)

A Geographic Breakdown of the MSCI ACWI IMI



The following content is sponsored by MSCI

MSCI ACWI IMI

A Geographic Breakdown of the MSCI ACWI IMI Index

How can investors track stock markets around the world?

Using the MSCI All Countries World Index Investable Market Index (MSCI ACWI IMI), investors can benchmark their portfolios to a comprehensive group of developed and emerging markets. With over $4.2 trillion in assets benchmarked to the ACWI—about 4% of all managed assets globally—the index is widely quoted.

In this graphic from MSCI, we explore a geographic breakdown of the MSCI ACWI IMI index, and how it has changed over time.

What is the MSCI ACWI IMI?

The MSCI ACWI IMI is a leading global equity index. It tracks the performance of a basket of securities that are intended to represent the entire global stock market. Altogether, it covers:

  • 9,200 securities
  • 23 developed markets
  • 27 emerging markets
  • 99% of the investable global equity market

Using a standardized approach, the index includes businesses of all sizes from small to large market capitalization.

Market Weights

The MSCI ACWI IMI Index is broken down into broad regions and specific markets, such as North America and the U.S. respectively. Below, we show the specific market weights of the index as of July 31, 2011 and July 31, 2021. We also show how much these weights have increased or decreased over the last 10 years.

MarketRegion2011 Weight2021 WeightPercentage Point Change
CanadaNorth America4.74%2.91%-1.8 p.p.
U.S.North America43.34%58.61%15.3 p.p.
Austria (Read more...)

Labor in the 21st Century: Cryptoeconomics, Communities and Global Markets


This post is by jlk from The Barefoot VC


Today is Labor Day in the United States, a day when we are supposed to reflect on everyday people who work hard to make sure our economy works. The past two years have upended the 20th century industrial model of working – with COVID, many workers had to work from home. Another group of workers, who we called “essential workers”, which included delivery workers, grocery workers, healthcare workers and first responders continued their physical work.

Underlying some of these bifurcations was an even larger movement at play, one that only started to gain momentum in early 2021, one year after COVID forced many workers home – the emergence of a crypto economy that enables creators to connect directly with collectors of their work. Last year we had a “DeFi” summer, where peer-to-peer finance was being conducted through crypto products worldwide. Many people, some of whom who hadn’t been able to previous borrow and lend through their existing markets, were able to do so and accumulate assets; others, not satisfied with the yields they were getting in the traditional markets, turn to DeFi to increase their potential returns.

This year, we saw a markedly different demographic start trading and collecting NFTs. The growing NFT infrastructure allowed those that were not able to find markets for their art before to monetize their work through online global communities. Twitter is full of stories of artists who have been able to make hundreds of thousands of dollars off of their art, and in return (Read more...)

RiskGrade: A More Intuitive Way to Calculate Investment Risk



The following content is sponsored by MSCI.

A More Intuitive Way to Calculate Investment Risk

What crucial factors come into play when choosing investments?

At a high level, there’s two sides to the equation: return and risk. While potential profit is important, the volatility or risk of those profits also plays a critical role. In this graphic from MSCI we introduce the RiskGrade™ metric, a more intuitive way of calculating investment risk.

What is RiskGrade™?

One way of measuring investment risk is through volatility. Low risk investments have a smaller range of price movements relative to their historical average, meaning they have less volatility. On the flip side, high risk investments have a larger range of price movements. This means their returns—both gains and losses—can differ substantially from the historical average.

Traditionally, this volatility is measured through standard deviation. However, standard deviation can be difficult for investors to interpret as it has no intuitive reference point. Enter RiskGrade: a score-based measure of volatility that uses a transparent methodology.

  1. Volatility is calculated by measuring the change in investment price over time.
  2. A scaling factor is applied to standardize scores.

In the second step, 100 is equivalent to a 20% standard deviation, which is the average long-term volatility of global equities. Cash would have a RiskGrade of 0, whereas a technology IPO may have a RiskGrade that exceeds 1,000. It should be noted that RiskGrade only captures risk from a market price perspective, and does not consider inflation risk.

(Read more...)