Index "global benchmark indexes that contribute to the investment process by serving as relevant and accurate performance benchmarks and effective research tools."2 In light of this objective, MSCI indexes are constructed in such a manner as to provide a "broad and fair market representation," which MSCI defines as an accurate reflection of business activities across and within industries, accessible to international investors. Unlike SSBGEI, which is based on simple rules, MSCI index construction is a four-step iterative process. First, MSCI identifies the equity universe in a given country, which includes all listed securities that can be characterized as equities, except investment trusts, mutual funds, and equity derivatives {99 percent of the world's total equity market capitalization). Second, market capitalization is adjusted to reflect the free float available to a nondomiciled investor. Third, securities are classified into one of the industries defined by the Global Industry Classification Standard. And as a fourth and final step, securities in each industry are analyzed to determine their inclusion in the index. Factors that affect the inclusion of a company in the index are the size of the company, its liquidity, and the level of market concentration. Although MSCI targets an 85 percent industry representation within each sector within each country, sector weights for the World index depend on both industry representation and the country relative market capitalization. Currently, sector weights in the MSCI World vary between 4 percent and 22 percent (see Figure 8.1). Index composition fas of June 28, 2002) is presented in Table 8.3, where relative index weights for all developed countries included in the MSCI World are listed. 2See Morgan Stanley Capital International, "MSCI Enhanced Methodology: Index Construction Objectives, Guiding Principles and Methodology for the MSCI Provisional Equity Index Series," May 2001.