"Refer to the following charts in the library. Could you clarify the difference between MSCI Europe and MSCI AC Europe. What chart would u recommend as being most representative of Europe. Thanks"

David Fuller's view Thank you for this question and while not wishing to employ sophistry, the answer will depend on how you define Europe. We do not have access to MSCI constituent data so we cannot assess exactly what these indices are representative of. However, both the MSCI Europe and MSCI Europe AC (All Countries) are capitalization weighted. The All Countries index has constituents from every country while the Europe Index has the largest companies in Europe. The MSCI Europe Index has a very similar pattern to the Stoxx 600 so I would tend to favour that Index as representative of Europe's main markets.

However, it might also be of interest that the MSCI All Countries Index outperformed from 2002 to 2008 and has underperformed since. This is at least in part attributable to the outperformance of small cap Eastern European markets over the early part of the decade and subsequent underperformance.