OneTrust Cookie Consent

Navigation

  • Skip to Content
  • Client Log In
  • Investor relations  (opens in a new tab)
  • Sustainability Institute  (opens in a new tab)
  • Subscribe
  • Contact us
  • Careers
  • Region
  • Go back to Main Menu
  • Client Log In
  • MSCI ONE  (opens in a new tab)
  • MSCI Client Support Site
  • Barra PortfolioManager
  • BarraOne  (opens in a new tab)
  • MSCI ESG Manager  (opens in a new tab)
  • MSCI ESG Direct  (opens in a new tab)
  • Global Index Lens
  • MSCI Real Assets Analytics Portal  (opens in a new tab)
  • RiskManager 3  (opens in a new tab)
  • CreditManager  (opens in a new tab)
  • RiskManager 4  (opens in a new tab)
  • Index Monitor  (opens in a new tab)
  • MSCI Datscha  (opens in a new tab)
  • MSCI Real Capital Analytics  (opens in a new tab)
  • Private i  (opens in a new tab)
  • Total Plan/Caissa  (opens in a new tab)
  • MSCI Wealth Manager (Fabric)  (opens in a new tab)
  • MSCI Carbon Markets  (opens in a new tab)
  • Go back to Main Menu
  • Region
  • China
  • India
  • Japan
Navigation

Navigation Menu

  • Our Clients
    • Go back to Main Menu
    • Our Clients
    • Asset Managers
    • Asset Owners
    • Banks
    • Corporates
    • Hedge Funds
    • Insurance Companies
    • Wealth Managers
  • Our Solutions
    • Go back to Main Menu
    • Our Solutions
    • Analytics
      • Go back to Our Solutions
      • Analytics
      • Analytics Overview
      • Risk Management
      • AI Portfolio Insights
      • Multi-asset Class Factor Models
      • Quantitative Investment Solutions
      • Fixed Income Analytics
      • Portfolio Management
      • Crowding Solutions
      • Regulatory Solutions
      • Managed Solutions
    • Climate Investing
      • Go back to Our Solutions
      • Climate Investing
      • Climate Investing Overview
      • Biodiversity
      • Carbon Markets
      • GeoSpatial Asset Intelligence
      • Portfolio Sustainability Insights
      • Real Estate Climate Solutions
    • Sustainable Investing
      • Go back to Our Solutions
      • Sustainable Investing
      • Sustainable Investing Overview
      • ESG Fund Ratings and Climate Search Tool
      • ESG Ratings
      • Impact Solutions
      • Sustainability Reporting Services
      • Sustainability and Climate Regulatory Toolkit
    • Factor Investing
      • Go back to Our Solutions
      • Factor Investing
      • Factor Investing Overview
      • Equity Factor Models
      • FactorLab
      • MSCI FaCS
      • Factor Indexes
    • Fixed Income
      • Go back to Our Solutions
      • Fixed Income
      • Fixed Income Overview
      • Fixed Income Analytics
      • Fixed Income Indexes
    • Private Capital
      • Go back to Our Solutions
      • Private Capital
      • Private Capital Overview
      • Private i
      • Total Plan Manager (formerly Caissa)
      • Emissions Footprinting
      • Private Capital Indexes
      • Private Company Data Connect
    • Real Assets
      • Go back to Our Solutions
      • Real Assets
      • Real Assets Overview
      • INCANS
      • Index Intel
      • Portfolio Services
      • Property Intel
      • Private Real Assets Indexes
      • Real Capital Analytics
    • Wealth Management
  • Indexes
    • Go back to Main Menu
    • Indexes
    • Indexes Overview
    • By Category
      • Go back to Indexes
      • By Category
      • By Category Overview
      • Climate
      • Market Cap
      • Fixed Income
      • Client-Designed
      • Sustainability
      • Factor
      • Thematic
      • Private Real Assets
      • Private Capital
    • Tools
      • Go back to Indexes
      • Tools
      • Tools Overview
      • Index Monitor
      • MSCI Index API
      • MSCI IndexMetrics®
      • Index Data Modules
      • Equity Index Constituents
      • Fixed Income Index Constituents
      • Index Profile Tool
      • Direct Indexing
    • Resources
      • Go back to Indexes
      • Resources
      • Resources Overview
      • Communications
      • Education
      • Equity Factsheets
      • Derivatives
      • Methodology
      • Performance
      • Regulation
  • Research & Insights
    • Go back to Main Menu
    • Research & Insights
    • Research & Insights
      • Go back to Research & Insights
      • Research & Insights
      • Research & Insights Overview
      • Carbon Markets
      • Climate
      • Equities
      • Factor Investing
      • Fixed Income
      • Multi-Asset Class
      • Private Capital
      • Real Estate
      • Sustainability
    • Events
      • Go back to Research & Insights
      • Events
      • Events Overview
      • On Demand
  • Discover MSCI
    • Go back to Main Menu
    • Discover MSCI
    • About Us
    • Technology
      • Go back to Discover MSCI
      • Technology
      • Technology Overview
      • Data Explorer
      • Developer Community
      • Technology and Data
    • Corporate Responsibility
      • Go back to Discover MSCI
      • Corporate Responsibility
      • Corporate Responsibility Overview
      • Enabling Sustainable Investing
      • Environmental Sustainability
      • Governance Practices
      • Social Practices
      • Sustainability Reports and Policies
    • Inclusion & Belonging
    • Media Room
    • Our Leadership
    • Recognition
  • Client Log In
  • Investor relations  (opens in a new tab)
  • Sustainability Institute  (opens in a new tab)
  • Subscribe
  • Contact us
  • Careers
  • Region
  • Go back to Main Menu
  • Client Log In
  • MSCI ONE  (opens in a new tab)
  • MSCI Client Support Site
  • Barra PortfolioManager
  • BarraOne  (opens in a new tab)
  • MSCI ESG Manager  (opens in a new tab)
  • MSCI ESG Direct  (opens in a new tab)
  • Global Index Lens
  • MSCI Real Assets Analytics Portal  (opens in a new tab)
  • RiskManager 3  (opens in a new tab)
  • CreditManager  (opens in a new tab)
  • RiskManager 4  (opens in a new tab)
  • Index Monitor  (opens in a new tab)
  • MSCI Datscha  (opens in a new tab)
  • MSCI Real Capital Analytics  (opens in a new tab)
  • Private i  (opens in a new tab)
  • Total Plan/Caissa  (opens in a new tab)
  • MSCI Wealth Manager (Fabric)  (opens in a new tab)
  • MSCI Carbon Markets  (opens in a new tab)
  • Go back to Main Menu
  • Region
  • China
  • India
  • Japan

Main Search

Popular searches:
ACWI (opens in a new tab) Research (opens in a new tab) ESG (opens in a new tab) Factor Investment (opens in a new tab) Insights Gallery (opens in a new tab) Asset Owners (opens in a new tab)
Might interest you:
Powering Better Portfolios through Technology and Data
MSCI offers clients mission-critical data and technology capabilities focused on quality, reliability, and scale. To power the next wave of growth,...
ESG Ratings
MSCI ESG Ratings provides insights into ESG risks and opportunities within multi-asset class portfolios.
Research
MSCI has applied pioneering ideas to real-world investment challenges for more than four decades.
Not All Listed Stocks Are Investable: The Concept of Free-Float Market Capitalization

Extended Viewer

 

Not All Listed Stocks Are Investable: The Concept of Free-Float Market Capitalization

 

Navneet Kumar
March 24, 2021

When assessing a potential investment within a given market, investors may want to consider the difference between total and free-float market capitalization. The former indicates company size (total market value), and the latter the level of capital (equity) available for investment. The free-float calculation uses the number of outstanding shares available for trading by international investors and is used by most indexes and index providers.

Shares may be excluded from a free-float calculation if:

Looking at the MSCI North America Investable Market Index (IMI), for example, we see the difference between total market capitalization and free-float market capitalization was relatively stable throughout the period shown, as it was for the MSCI EMEA and MSCI Pacific IMI, though differences in these regions were larger. The number of securities in all three markets fell slightly between 2010 to 2012, with MSCI EMEA IMI showing the largest and most persistent decline.

When we look at the MSCI Emerging Markets IMI, however, the story changes. The difference between total and free-float market capitalization has increased over time, driven by a sharp rise in total market cap. The number of securities in the index also has grown, especially with the inclusion of China A shares, beginning in 2018. These results suggest that companies coming to market more recently may have a greater share of capital that is not accessible to international investors.

Investors can compare total and free-float market capitalization to better understand the capital structure of a company and monitor large ownership stakes, which, when sold, may impact share prices. MSCI research also has shown a link between higher free float and higher levels of corporate governance.

Note: EMEA IMI is back filled with EU IMI prior to May 2010.



Related Content

Global Investing Trends

Investing globally can help investors work toward global diversification, tap into new opportunities for growth and harness the potential in the rise in importance of emerging markets.

Learn More

Where next in terms of Global Growth?

While most countries’ real GDP growth was buffeted in 2020 by the COVID-19 pandemic, the emerging market & developing economies were less affected (-3.3%) than advanced ones (-5.8%).

Read More

Does positive GDP growth lead to strong stock returns?

Traditionally, GDP growth has been thought of as a leading indicator for domestic stock-market performance. But has this changed?

Explore the Chart

msci logo
  • Terms of Use
  • Legal
  • Modern Slavery Statement
  • Privacy notice
  • Index regulation
  • Locations
  • Cookies
  • Use of ISO standards
  • Site map
Subscribe Contact us
© 2025 MSCI Inc. All rights reserved

UtmAnalytics