Usually refers to indices constructed by Morgan Stanley Capital International such that the market capitalization weights reflect the degree to which a stock is investible by foreigners. For example, if a stock has $700 million capitalization but government restrictions only allow up to 50% to be held by foreigners, then the weight in the Free index would by $350 million. The Standard and Poors/International Finance Corporation indices call their equivalent indices Investible Indices (IFCI).
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A series of indices developed by Morgan Stanley tracking securities that trade in various countries; the indices are weighted for market capitalization and the ability for foreigners to invest in them. For example, a free index may have a market capitalization of $1 billion, but if the laws of the countries in which the securities trade only allow up to 25% foreign ownership, the free index lists a market capitalization of $250 million. A prominent free index is the emerging markets free index. See also: BRIC.
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