The MSCI (Morgan Stanley Capital International) BRIC (Brazil Russia India and China) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance across the following 4 Emerging Markets country indexes: Brazil, Russia, India and China. With 305 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.
The index is based on the MSCI Global Investible Market Indexes (GIMI) Methodology—a comprehensive and consistent approach to index construction that allows for meaningful global views and cross regional comparisons across all market capitalization size, sector and style segments and combinations. This methodology aims to provide exhaustive coverage of the relevant investment opportunity set with a strong emphasis on index liquidity, investibility and replicability. The index is reviewed quarterly—in February, May, August and November—with the objective of reflecting change in the underlying equity markets in a timely manner, while limiting undue index turnover. During the May and November semi-annual index reviews, the index is rebalanced and the large and mid-capitalization cut-off points are recalculated.
The index is calculated using the Weighted Average Market Capitalization methodology where the price multiplied by the free float gives the market capitalization of its constituents. The weightage of each company is arrived at by dividing the market capitalization of each company with the total market capitalization of all the 305 companies. The larger the market weightage of the company the larger is the impact due to 1% change in its price on the index.
Financials at 29.99% followed by Energy at 19.69%, Information Technology at 10.31%, Consumer Staples at 9.23%, Materials at 7.41%, Telecommunication Services at 6.86%, Industrials at 5.15%, Consumer Discretionary at 4.96%, Utilities at 4.13% and Healthcare at 2.27% for the sector allocation in the index.
The Country specific weights has China at 44.23% followed by Brazil at 26.25%, India at 16.51% and Russia at 13.02%.
The MSCI Emerging Market Index has given a return of 15.84% on a year on year basis and has gained 4.25% on a month on month basis. The index has a Price to Earnings ratio of 10.48 in the current scenario. Tencent Holdings company of China has the highest weightage of 4.59% in the index followed by China Mobile with a weightage of 3.45%, China Construction Bank with 3.2%, Gazprom with 3.02% and ICBC H of China at 2.74% while others have less than 2.5% weightage each in the index.