MSCI is one of the most common acronyms that you’ll encounter as you begin to explore the world of international investing. But you might be surprised to know that even experienced investors know very little about MSCI or its history.
The MS part of the acronym stands for Morgan Stanley. As a result, it is often assumed that the MSCI indices are calculated by Morgan Stanley, the investment bank. While Morgan Stanley is a majority shareholder of MSCI, they are actually separate companies. Morgan Stanley itself has nothing to do with the construction or maintenance of the MSCI indices.
The second half of the acronym involves yet another company. CI stands for Capital International. This company was a unit of the Los Angeles-based investment management firm Capital Group. In the late 1960s, Capital International created a series of stock market indices that tracked international markets.
In 1986, Morgan Stanley bought the marketing rights to Capital International’s data and Morgan Stanley Capital International, or MSCI, was born. In 2004, MSCI bought a firm called Barra, and the firm has since been known as MSCI Barra.
MSCI Barra went public on the New York Stock Exchange in November 2007.