MSCI World index (ACWI): bullish acceleration

The interest of this index is primarily its depth (1376 shares) which allows it to be a good proxy for the world economy, but with a strong US weighting (55.6%) while China is under-represented at 5.15% if Hong Kong is included.

All emerging countries represent c.15% of the index's capitalization, compared with 85% for developed countries, including 7% for Japan and 22% for Europe.

The top 10 stocks of the MSCI World are essentially large American stocks (Apple, Amazon, Microsoft, JP Morgan, Exxon ...), which represent 11% of the index.

Sector weighting further favors growth sectors, as do technology stocks that account for about 15% of weighting. Financials represent 17% of the index and energy stocks 6%, which are well balanced by defensive sectors such as health (about 11%) and consumer discretionary (11%).

The index enjoys positive trend thanks to the strong momentum of the US market, which acts as a driving force thanks to its technology sector, and has been joined by emerging countries and recently by Europe for a few weeks.

In 2018, the MSCI World Index fell by 11%, reflecting concerns over global growth in the fourth quarter, mainly due to the US-China trade war and the Fed's monetary policy which became more restrictive. In 2019, the index has caught up due to a positive newsflow on these two topics, and has increased by more than 14% with all geographic areas uptrend.

Emerging countries (Latin America and Asia) are a second growth driver for the index, which results from the stabilization of the dollar, the decline in US and European long-term rates, as well as continued high growth, although at a lower level.

 

Instruments : ACWI (iShares in USD), ACWIA (UBS in USD), ACWI (Lyxor in Euro)