World Equity Benchmark Series (WEBS)

Overview

The World Equity Benchmark Series (WEBS) was a family of international equity funds launched in 1996 by Morgan Stanley and traded on the American Stock Exchange. WEBS were structured as hybrid securities with characteristics of both open-end and closed-end funds and were designed to give U.S. investors a simple way to gain exposure to foreign and emerging-market equities.

How WEBS worked

• Structure: WEBS combined elements of closed-end funds (publicly traded shares with a fixed number issued) and open-end funds (broadly diversified portfolios that pooled investor capital). Each WEBS fund owned the securities represented in the corresponding MSCI country or regional index in roughly the same market-cap weighting.
• Trading: Like stocks, WEBS shares could be bought and sold throughout the trading day on an exchange, enabling intraday liquidity and price discovery.
• Purpose: WEBS provided an efficient means of international diversification by offering country- and region-specific exposure without the need to buy individual foreign stocks.

Typical coverage

WEBS were launched for many developed and emerging markets. Examples included:
– Australia, Austria, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan
– Malaysia, Mexico, Netherlands, Singapore, South Korea, Spain, Sweden, Switzerland, United Kingdom

Rebranding and legacy

In 2000, the WEBS family was rebranded under a consistent ETF umbrella managed by Barclays Global Investors (now BlackRock) as the iShares MSCI series. For example, WEBS funds became iShares MSCI country ETFs, and the emerging markets WEBS evolved into the iShares MSCI Emerging Markets ETF, which seeks to track the MSCI Emerging Markets Index of large- and mid-cap stocks.

Comparison with broad-market ETFs

WEBS/iShares MSCI ETFs function similarly to other index-tracking exchange-traded funds such as the SPDR S&P 500 Trust (SPDRs), which track the S&P 500. Both types of ETFs offer:
– Index-based exposure (country, region, or market-cap segment)
– Intraday tradability on exchanges
– A route to diversified market exposure without buying individual securities

Key takeaways

• WEBS were an early family of tradable international index funds introduced in 1996 to simplify foreign equity investing for U.S. investors.
• In 2000 WEBS were rebranded into the iShares MSCI ETF lineup, standardizing ETF offerings under a global brand.
• These funds provided country- and region-specific exposure and are conceptually similar to broad-market ETFs like SPDRs in offering indexed, exchange-traded access to equity markets.