MSCI Consumer Discretionary Index

A global sector benchmark that tracks large‑ and mid‑cap companies whose revenues stem primarily from non‑essential goods and services—such as automobiles, apparel, e‑commerce and entertainment—thereby giving investors a focused lens on consumer‑spending trends beyond day‑to‑day necessities.

1. Snapshot (May 2025)

Metric	Value
Constituents	≈ 240 stocks
Countries	23 developed + 24 emerging markets
Total Float Market Cap	US $5.3 trillion
Dividend Yield	1.2 %
Review Frequency	Quarterly (Feb / May / Aug / Nov)
Currency	USD (local FX series available)

2. Inclusion Rules

First, companies must reside in either the MSCI World or MSCI Emerging Markets universes. Next, they must carry a GICS Consumer Discretionary sector code—covering automobiles, media, retail, leisure & travel, and consumer services. After that, only the top 85 % free‑float market‑cap tier (large + mid caps) from each country enters the index. Finally, float factors and foreign‑ownership limits adjust weights, ensuring investibility.

3. Regional & Industry Weights (April 2025)

Region	Weight*	Leading Industry
United States	51 %	E‑commerce & Online Retail
China	18 %	Internet Retailers
Japan	7 %	Automobiles
Europe ex‑UK	7 %	Luxury Goods
South Korea	4 %	Consumer Electronics
Rest of World	13 %	Diverse

*Free‑float weights; single‑stock cap ≈ 8 %.

Sub‑Industry	Weight*
Internet & Direct Marketing Retail	23 %
Automobiles	18 %
Apparel & Luxury Goods	14 %
Consumer Services	10 %
Hotels, Restaurants & Leisure	9 %
Others	26 %

4. Recent Performance (USD)

Year	Total Return	Main Catalyst
2022	–28.4 %	Rate hikes hit growth multiples
2023	+38.6 %	AI‑driven e‑commerce rebound
2024	+16.2 %	Luxury outperforms on China reopening
YTD 2025	+7.4 %	Auto electrification momentum

Volatility averages 20  %, higher than the parent MSCI ACWI due to growth tilt.

5. Why Investors Use It

Targeted Consumer Beta – One ticker captures discretionary spending sensitivity worldwide.
Benchmarking – Active sector funds gauge alpha versus this transparent yard‑stick.
ETF Access – Products like XLYG or CSDI replicate the basket.
Macro Signal – Index moves often lead retail‑sales data, thus informing economic forecasts.

6. Strengths & Limitations

Strengths	Limitations
Rules‑based, quarterly refreshed	Heavy U.S. weight (> 50  %) adds regional bias
Float adjustment ensures liquidity	Excludes small‑cap innovators until they scale
Cross‑market coverage (DM + EM)	Growth‑stock valuation swings raise volatility

7. Trends to Watch

EV Adoption: Auto makers shifting to electric could lift sub‑industry weight above 22  % by 2027.
Luxury Resilience: Premium brands enjoy pricing power, cushioning downturns.
Digital Entertainment: Rising streaming engagement may expand media share within the index.
AI Shopping Assistants: E‑commerce platforms integrating AI could further widen revenue gaps versus brick‑and‑mortar peers.

Key Takeaways

The MSCI Consumer Discretionary Index bundles ~240 large‑ and mid‑cap stocks tied to non‑essential spending.
U.S. e‑commerce and Chinese internet retailers dominate, while autos and luxury goods provide cyclical and premium exposure.
Used for benchmarking, ETFs and macro signals, the index offers targeted global consumer‑beta—but investors should mind its growth‑stock volatility and regional concentration.

1. Snapshot (May 2025)