Standard MSCI Capped Indices
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Each MSCI Capped Index is constructed based on a standard MSCI parent index. Capping parameters may be applied to any single security or to a defined group of securities in the parent index. The Frontier Markets 15% Country Capped Index, for example, groups the constituents of the Frontier Markets Index (the parent index) by country and applies a maximum 15% weight for any one country in the parent index. |
MSCI Capped Indices can also apply maximum weights to other security groupings in the parent index such as: sectors, industry groups, industries or sub-industries, based on the Global Industry Classification Standard (GICS®).
Capping parameters are applied at each quarterly rebalancing of the parent index. If the weight of any group in the parent index is greater than the specified maximum weight, its weight will be capped at the maximum weight.
Securities within the group that is capped are weighted in proportion to their free float-adjusted market capitalization. The weight of the securities outside the capped group will be increased in proportion to their market cap weights.