Developed Markets
High-income economies with mature, accessible financial markets, including the US, Western Europe, Japan, and Australia.
What is Developed Markets?
Developed markets (DM) are high-income economies with well-established, liquid, and accessible financial markets, strong regulatory frameworks, and transparent governance. MSCI classifies developed markets based on economic development, market size and liquidity, and market accessibility criteria. Current MSCI Developed Markets include the US, Canada, UK, Germany, France, Japan, Australia, and 16 other countries. They account for the majority of global stock market capitalization. Developed market equities offer lower volatility, stronger investor protections, and more established legal systems than emerging markets, but typically lower long-term growth prospects due to aging populations and mature economies. The MSCI World Index covers large and mid-cap equities across developed markets.
Example
The MSCI World Index, covering 23 developed market countries, is dominated by US stocks at roughly 70% of the index. An investor buying a global developed market ETF like the iShares MSCI World ETF (IWRD) gets broad exposure to thousands of large and mid-cap companies across the developed world — providing geographic diversification while staying within well-regulated, liquid markets.