Introduction
The FTSE All‑World and MSCI ACWI (All Country World Index) are globally recognised equity benchmarks. Both offer extensive exposure across developed and emerging markets, focusing on large‑ and mid‑capitalisation companies. Despite their shared objective, they exhibit distinct differences in coverage, methodology, and composition.
Index Providers and Coverage
FTSE All‑World
Managed by FTSE Russell, this index is part of the FTSE Global Equity Index Series, which spans a wide spectrum of global equity markets. The FTSE All‑World index includes around 4,221 to 4,300 large‑ and mid‑cap stocks across a broad range of developed and emerging economies, covering approximately 90 to 95 percent of the global investable equity market.
MSCI ACWI
Offered by MSCI Inc., the MSCI ACWI captures approximately 2,524 to 2,800 large‑ and mid‑cap stocks spanning 23 developed and 24 emerging markets, representing around 85 percent of the global investable equity market.
Constituents and Geographic Diversification
Comparative Scope
- FTSE All‑World includes significantly more constituents, roughly 4,200+, offering broader stock and country coverage.
- MSCI ACWI includes fewer companies, about 2,500–2,800, reflecting a more concentrated universe.
Country Weightings (Approximate)
| Index | USA | Japan | UK | China | Others |
|---|---|---|---|---|---|
| FTSE All‑World | ~62.9% | ~5.8% | ~3.5% | ~3.5% | ~21.9% |
| MSCI ACWI | ~64.6% | ~4.9% | ~3.4% | ~3.2% | ~21.2% |
These figures indicate that while U.S. stocks dominate both indices, FTSE All‑World assigns a slightly higher share to “Others”—reflecting greater exposure to smaller or additional markets not covered by MSCI ACWI.
Sector Composition
The sector weightings in both indices are broadly similar, though there are nuanced differences:
FTSE All‑World
- Technology: ~26.5%
- Consumer Discretionary: ~14.3%
- Financials: ~13.8%
- Industrials: ~13.1%
- Health Care: ~9.1%
MSCI ACWI
- Technology: ~23.4%
- Financials: ~18.1%
- Health Care: ~10.3%
- Consumer Discretionary: ~10.6%
- Industrials: ~10.6%
FTSE All‑World places greater emphasis on sectors like technology and consumer discretionary, whereas MSCI ACWI leans more toward financials and healthcare.
Top Holdings
The two indices share similar leading constituents, though weightings differ.
Top Constituents by Weight (approximate):
- Both: Apple, Microsoft, Nvidia, Amazon, Meta Platforms, Alphabet, Broadcom, Tesla, Berkshire Hathaway
- FTSE All‑World: Apple (~4.23%), Microsoft (~3.61%), Nvidia (~3.28%)
- MSCI ACWI: Apple (~4.40%), Microsoft and Nvidia (~3.49% each)
Performance and Practical Considerations
Historical performance of fund products replicating each index tends to be very similar, with occasional slight advantages depending on market conditions and time horizon.
In a comparison of hypothetical returns, one scenario reflected modestly higher average returns for MSCI ACWI over a given period, though variances were minimal.
Expense Ratios
Typical ETFs tracking these indices offer low total expense ratios (TERs):
- FTSE All‑World: around 0.22%
- MSCI ACWI: slightly lower, around 0.20%
Summary Table
| Feature | FTSE All‑World | MSCI ACWI |
|---|---|---|
| Provider | FTSE Russell | MSCI Inc. |
| Number of Constituents | ~4,200+ | ~2,500–2,800 |
| Global Market Coverage | ~90–95% | ~85% |
| Country Exposure | Slightly more “Others” | Slightly more concentrated on major markets |
| Sector Exposures | More Technology, Consumer Discretionary | More Financials, Healthcare |
| Top Holdings | Apple, Microsoft, Nvidia (varied weights) | Similar list, slightly different weights |
| Expense Ratio (ETFs) | ~0.22% | ~0.20% |
| Historical Performance | Very similar, marginal differences | Very similar, marginal differences |
Conclusion
FTSE All‑World and MSCI ACWI deliver comprehensive global equity exposure through large‑ and mid‑cap stocks across numerous countries. FTSE All‑World offers broader coverage in terms of total countries and constituents, while MSCI ACWI maintains a leaner composition. Sector splits display only moderate distinctions, and performance outcomes are largely comparable. Expense ratios of representative ETFs tracking each index are low and close in range. When selecting between them, the decision often hinges on desired breadth of coverage and slight methodological preferences.
