What is the MSCI World: the index most index funds track
If you've looked at index funds, you'll have seen the name everywhere: MSCI World. It's the most tracked benchmark index among global index funds. But it's worth knowing what it really contains before investing in it.
What it includes
The MSCI World groups around 1,400 large and mid-cap companies across 23 developed countries (US, Japan, UK, France, Germany, Canada, Switzerland, Australia…). By buying a fund that tracks it, you own a tiny fraction of all of them at once: it's global diversification in a single product.
Why the US weighs so much
The index is weighted by market cap: the biggest companies weigh more. Since the world's largest companies are mostly American, the US is around 70% of the MSCI World, with a very high weight in the tech sector. It's not a "balanced" split across countries — it reflects the real size of each market, and it's worth understanding before assuming you're "spread across the whole world".
What it does NOT include
A nuance that surprises many: the MSCI World only holds developed countries. It excludes emerging markets like China, India, Brazil or Taiwan. That's what the MSCI Emerging Markets is for, or the combined version, the MSCI ACWI, which adds both. If you want true "whole world" exposure, keep this in mind.
MSCI World vs S&P 500
Since the US dominates the MSCI World, it looks a lot like the S&P 500 — but it's not the same: the MSCI World adds Europe, Japan and other developed markets. We compare their year-by-year behavior in MSCI World vs S&P 500, and you can see what you'd have gotten investing in it with the MSCI World historical simulator.
Try it yourself: use the compound interest calculator to simulate your case with your own numbers, see the charts and find your break-even point.
How to invest in the MSCI World
Many providers offer funds and ETFs that track this index; they differ mainly in the TER and whether they're accumulating or distributing. Browse them in the Global catalog category, sort them by cost in the cheapest global funds ranking, and decide with the guide to choosing an index fund. Remember: past returns don't guarantee future ones, and this is educational content, not a recommendation.