Total capitalization information

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Topic Author
tancredi
Posts: 4
Joined: Wed Aug 07, 2019 3:30 pm

Total capitalization information

Post by tancredi » Tue Aug 13, 2019 5:40 am

Hello everyone,

I often read on this forum how people distribute their asset according to total capitalization of the index fund.
For example, a typical distribution is 76/12/12 for IWDA/EIMI/WSML.

I have a very basic question: what are the sources of reliable information on the total capitalization of a fund at any given time?
For example the total capitalization of IWDA, EIMI, or WSML?

Thank you!

alex_686
Posts: 4753
Joined: Mon Feb 09, 2015 2:39 pm

Re: Total capitalization information

Post by alex_686 » Tue Aug 13, 2019 5:56 am

Are you talking about the “Free Float Market Capitalization” of a company the oa any index, which is a sum of the underlying companies?

Getting the first is a bit tricky. Every index provided does it differently and they charge for this premium information. However you should be able to find the index’s value from the indexer’s website.

User avatar
BeBH65
Posts: 1460
Joined: Sat Jul 04, 2015 7:28 am

Re: Total capitalization information

Post by BeBH65 » Tue Aug 13, 2019 7:22 am

Every indexprovider has its preferences. You can find info on their site:

For example MSCI ACWI Index country allocation
54.41% United States
7.58% Japan
5.21% United Kingdom
3.42% France
3.6% China
25.7% Other

- typically LC, MC, SC are fixed % - read the docs provided by index providers
- regional allocation changes with time - as stock markets in region rise and fall.

Remark that some countries are EM for one index provider and not for anohter one SouthKorea + Taiwan.

Another way of getting the info is to look at a Total(World)Market funds and to see the distribution there.


Also credit suisse yearbook - often has some information
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles

Topic Author
tancredi
Posts: 4
Joined: Wed Aug 07, 2019 3:30 pm

Re: Total capitalization information

Post by tancredi » Tue Aug 13, 2019 12:17 pm

Sorry for not being clear.

I'll reformulate: how do people come up with these numbers, e.g. 76% for IWDA, 12% for EIMI and 12% for WSML?
I presume it is from the total capitalization of these index? Can someone please guide me through how this is calculated from the data source.
Thank you.

User avatar
BeBH65
Posts: 1460
Joined: Sat Jul 04, 2015 7:28 am

Re: Total capitalization information

Post by BeBH65 » Tue Aug 13, 2019 12:44 pm

The indexes you mention are float market-cap indexes.
Each of them covers a portion of the world market.

MSCI world covers Large Cap en Mid-Cap stocks from the developed markets
MSCI world Small caps covers Large-Cap and Mid-Cap from the developped markets
MSCI Emerging markets IMI covers the full Investable Market from the emerging markets.

MSCI specifies that their small cap funds of cover the bottom 15% of the market. (*)

Emerging markets is at this moment, apparantly, 12% give or take 1% of the total markets.


Based on this one can define a theoretical combination.

Using tools like Morningstar XRay one can validate the result. Morningstar splits the market in 70% Large Cap 20% Mid Cap en 10% Small Cap (*)
Based on the results of this tool, it looks like taking a slightly higher portion of MSCI small cap is needed to fully fill the Small-Cap allocation in the Morningstar style box.

(*) notice that MSCI en morningstar split the market differently between Large Cap,Mid Cap, en Small Cap. So a stock which is SC for MSCI might be MId cap for Morningstar.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles

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