Sizing Up the Global-Market Portfolio
Key findings
- By the end of 2023, MSCI estimated that the investable global-market portfolio reached a market value of USD 213 trillion, reflecting 11% year-on-year growth.
- In 2023, fixed income remained the dominant asset class, but its share declined slightly (by -1.4 percentage points), while public equities’ weight increased (+2.4 percentage points).
- The dominance of the U.S. market and the surge of the information-technology sector were key trends shaping the investment landscape.
The global-market portfolio represents the aggregate financial assets of all investors worldwide. Institutions can benefit by monitoring its composition and evolution, to shed light on investor preferences, as well as trends in asset-class weights.[1]
In this blog post, we examine the MSCI estimate of the size of the global-market portfolio, as of the end of 2023, the changes for each asset class and their corresponding regional and sectoral composition.[2] Over the past year, the global-market portfolio has grown, with all constituent asset classes experiencing an increase in total market value driven by gains in market value, currency movements and asset creation. The year-on-year 11% growth by the end of 2023 is well above the 5.7% annualized average growth rate seen over the last decade. Similar to the previous two decades, the largest asset classes in the global-market portfolio are fixed income (USD 116 trillion) and public equity (USD 77 trillion).[3]
Estimating the size of the global-market portfolio
MSCI's estimate of the global-market portfolio encompasses investment opportunities such as public stocks and bonds and private assets. The full global-market portfolio had an estimated market value of USD 271 trillion, as of the end of 2023, up from USD 248 trillion the year prior (see exhibit below). Meanwhile, the investable global market — excluding investments that are not easily accessible to institutional investors[4] — was valued at USD 213 trillion as of December 2023, up from USD 192 trillion. As noted, fixed income remained the dominant asset class, as it has been for the past decade, comprising over half of the global-market portfolio with a valuation of USD 116 trillion, representing 54% of the total at the end of 2023. Public equities accounted for a third of the global market, at USD 77 trillion, and played a significant role in the global-market portfolio's expansion over 2023.
Where asset-class composition stands
Market size of the full and investable global-market portfolios (in USD trillions and relative weights of the asset classes). As of Dec. 31, 2023. Source: Bank for International Settlements, MSCI
The investable global market may have expanded by USD 91 trillion, or a 5.7% geometric average, on an annual basis in the past decade, but growth has not been steady. Based on MSCI estimates, the biggest expansion happened in 2020, with a 17.4% increase, and the steepest decline occurred in 2022, with a 7.7% decrease, as shown in the exhibit below.
Evolution of the investable global-market portfolio
In 2023, the market value of all asset classes increased (see the second panel of the exhibit below). Public equity, the second-largest asset class, contributed most to USD-value growth, adding USD 12 trillion in 2023. This asset class also saw the largest increase in its weight during this period, growing by 2.4 percentage points (panel 1 in the exhibit below), while fixed income and real estate's share decreased year on year. The relative increase in the market valuation of unlisted infrastructure was primarily driven by capital calls rather than performance improvements (see panel 3 in the exhibit below).
Year-on-year change in the global-market portfolio
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Year-on-year absolute change in asset-class weight (panel 1) and market capitalization (panel 2) as well as relative change in market capitalization (panel 3).
Regional composition
As of the end of 2023, the U.S. remained the dominant region in the global-market portfolio (see the exhibit below). It was the largest region in public-equity markets, with a free-float-adjusted market capitalization of USD 44.6 trillion, and in fixed-income markets, with USD 44.7 trillion debt outstanding, and also maintained its leadership in the private-equity market, with USD 2.3 trillion in net asset value.
Regional composition of the investable global market (%)
Data as of December 2023.
Sector shifts through the years
We also compared the sector composition of global public- and private-equity markets (see the exhibit below).[5] At the end of 2023, information technology was the dominant sector in both asset classes, reflecting the rise of tech companies and the digital transformation across industries.
Sector composition of private-equity funds relative to public markets
Data as of Dec. 31, 2023.
Private equity has been more concentrated in the information-technology sector, however, with a 30% share compared to 22% in public equities, but the weights converged a little in 2023 (as shown in the exhibit below). Conversely, financial companies remain more prominent in public markets, at 17%, although the public-equity financial sector's weight has been declining in recent years, reflecting the evolving financial landscape, driven by the rise of financial technology, alongside shifts in regulatory policies and the de-rating of listed companies due to weaker returns on capital.
Evolution of select sector weights in private-equity funds and public markets
Data from December 2006 to December 2023.
The global-market portfolio and market change
Studying the evolution of the global-market portfolio has provided insights into market sentiment, issuance trends and shifts in regional and asset-class dynamics. In 2023, the prominence of the U.S. market and the rise of the information-technology sector in equities underscored key trends that were shaping the investment landscape.
1 We cover public equity, public fixed income, listed and unlisted real estate, infrastructure and private equity and credit. We excluded commodities from our estimate of the global-market portfolio, as they are generally not considered a capital asset.2 For more details on the concept of the global-market portfolio and trends of previous years, see MSCI's analysis for the Norwegian Ministry of Finance, “Global Markets & Return Drivers” and “Report for the Norwegian Ministry of Finance 2024.”3 The public-equity market is represented by the aggregate market capitalization of all large-, mid- and small-cap stocks that were part of and considered for inclusion in the MSCI ACWI and MSCI Frontier Markets Investable Market Indexes, as well as stand-alone equity indexes not part of those indexes. The private-equity market is represented by the pooled net asset value of equity funds in the MSCI Private Capital universe. We source fixed-income data from the Bank for International Settlements (BIS). Based on the BIS definition, debt securities include the following instruments: bills, bonds, notes, negotiable certificates of deposit, commercial paper, debentures, asset-backed securities, money-market instruments and similar instruments normally traded in financial markets.4 The investable global-market portfolio refers to a subset of the full global-market portfolio that is realistically accessible to institutional investors. To estimate the investable equity market, we used the free-float-adjusted market capitalization of companies in the index. The value of the investable fixed-income market was sourced from the BIS, with exclusion of central-bank and foreign-official holdings of government debt (the latter based on IMF figures). Private-asset valuations represent the aggregate holdings of all known closed-end private-capital funds and are not adjusted based on investablility.5 We used the Global Industry Classification Standard (GICS®) for sector categorization. GICS is the industry-classification standard jointly developed by MSCI and S&P Global Market Intelligence.
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