MSCI World Index ETF: A Comprehensive Guide

The MSCI World Index ETF is a popular investment option for those looking to diversify their portfolio and gain exposure to the global equity market. It tracks the MSCI World Index, which covers over 1,600 large and mid-cap stocks from 23 developed markets.

The MSCI World Index ETF is designed to provide broad diversification, with a portfolio that includes a mix of established and emerging market stocks. This diversification can help reduce risk and increase potential returns over the long term.

Investors can buy shares of the MSCI World Index ETF through various online brokerages or financial institutions. The ETF is available in different share classes, including accumulation units and income units, which can cater to different investment goals and strategies.

A unique perspective: Dividend Stocks vs Index Funds

The MSCI World Index is a global equity index that tracks stocks from 23 developed countries, covering around 85% of the free float-adjusted market capitalization in each country.

It has 1,397 constituents as of November 29, 2024. The index is dominated by stocks from the USA, which make up 73.92% of the index, followed by Japan with 5.23% and the UK with 3.44%.

Explore further: Index Funds vs Stocks

Information technology is the largest sector in the MSCI World Index, accounting for 25.29% of the index. The index is also heavily weighted towards financial services, making up 16.30% of the index.

The MSCI World Index is used as a benchmark for many investment products, including 21 ETFs that track its performance.

Here's an interesting read: Msci World Index Ticker Symbol

The MSCI World Index ETF is a popular choice among investors, and for good reason. It tracks the performance of the MSCI World Index, a broad market index that includes stocks from developed markets around the world.

The fund's inception date is July 19, 2023, and its index inception date is December 31, 2009. As of December 31, 2024, the fund's net performance is -1.99% for the one-month period.

The fund's net performance for the three-month period is 1.79%, and for the YTD (year-to-date) period, it's 20.11%. The fund's gross performance is very similar, with a 1.98% loss for the one-month period and a 20.32% gain for the YTD period.

A fresh viewpoint: Where the World Is Heading?

It's worth noting that the fund's performance is compared to the MSCI World 100% Hedged to EUR Index. As of December 31, 2024, the index's performance is -2.03% for the one-month period and 19.89% for the YTD period.

Here's a summary of the fund's performance as of December 31, 2024:

The fund's performance is also compared to its inception date, which is July 19, 2023. As of December 31, 2024, the fund's net performance is 25.04% since inception, and its gross performance is 25.35%.

The MSCI World Index ETF is a popular investment option, but let's take a closer look at the charts and data behind it.

The MSCI World Index is a market-capitalization-weighted index that tracks the performance of over 1,600 stocks from 23 developed markets around the world.

It's worth noting that the index has a dividend yield of around 2.5%, which can provide a regular income stream for investors.

Additional reading: Wonderful World

The MSCI World Index has a total market capitalization of over $50 trillion, making it one of the largest and most widely followed indexes in the world.

As of 2022, the index has a price-to-earnings ratio of around 22, which is slightly higher than the historical average.

Investors can gain exposure to the MSCI World Index through various ETFs, including the iShares MSCI World ETF, which has over $20 billion in assets under management.

The ETF tracks the index with an expense ratio of around 0.2%, making it a relatively low-cost option for investors.

The MSCI World Index has historically provided a return of around 6-7% per annum over the long term, making it a popular choice for long-term investors.

The cost and fees associated with MSCI World ETFs are quite reasonable. The total expense ratio (TER) of these ETFs is between 0.10% p.a. and 0.50% p.a..

You can find some of the cheapest MSCI World ETFs by looking at the list of top 3 cheapest ETFs, which includes the UBS ETF (IE) MSCI World UCITS ETF (USD) A-acc and A-dis, both with a TER of 0.10% p.a.

Here's a breakdown of the fees for one of the MSCI World ETFs:

Cost and fees are a crucial aspect of investing in ETFs. Understanding what you're paying for is essential to making informed decisions.

The total expense ratio (TER) of MSCI World ETFs can range from 0.10% to 0.50% per annum. This is significantly lower than most actively managed funds.

The cheapest MSCI World ETF by total expense ratio is the UBS ETF (IE) MSCI World UCITS ETF (USD) A-acc, with a TER of 0.10% p.a. It's tied with its A-dis counterpart.

The expense ratio of a fund is made up of several components, including the management fee, acquired fund fees and expenses, and other expenses. Let's take a look at a breakdown of these fees:

Keep in mind that these fees are subject to change and may not reflect extraordinary expenses incurred by the fund.

When evaluating the costs associated with investing in a MSCI World ETF, it's essential to consider the fund size, as it can impact the overall cost of ownership.

The largest MSCI World ETF by fund size in EUR is the iShares Core MSCI World UCITS ETF USD (Acc), with a massive 90,222 million euros in assets under management. This fund size can lead to economies of scale, potentially reducing costs for investors.

Investors should also note that the second-largest fund, Xtrackers MSCI World UCITS ETF 1C, has a significantly smaller asset base of 13,549 million euros, which may result in higher costs per unit.

Here are the top 3 largest EUR funds, ranked by fund size:

A larger fund size can be beneficial for investors, as it often translates to lower costs and higher liquidity.

Comparing MSCI World ETFs can be a daunting task, especially with so many options available. The TER (total expense ratio) varies significantly among the ETFs, ranging from 0.10% p.a. to 0.50% p.a.

Some ETFs, like the UBS ETF (IE) MSCI World UCITS ETF (USD) A-acc, have a TER as low as 0.10% p.a., making them a cost-effective option.

A key consideration when selecting an MSCI World ETF is the use of profits. Some ETFs, such as the iShares Core MSCI World UCITS ETF USD (Acc), accumulate profits, while others, like the Amundi MSCI World UCITS ETF Dist, distribute them.

Here's a breakdown of the use of profits among the top 5 ETFs by fund size:

Ultimately, the choice of MSCI World ETF will depend on your individual investment goals and preferences.

Comparison is key when it comes to making informed decisions. In the case of MSCI World ETFs, there are several factors to consider. Fund size is one of them, with the iShares Core MSCI World UCITS ETF USD (Acc) having the largest fund size of 90,222 million EUR.

The TER, or total expense ratio, is another important factor to consider. It's the annual cost of owning the fund, expressed as a percentage of the fund's net asset value. The HSBC MSCI World UCITS ETF USD has one of the lowest TERs at 0.15% p.a.

Accumulating and distributing are the two main use of profits methods for MSCI World ETFs. Accumulating funds reinvest dividends, while distributing funds pay out dividends to investors. The iShares Core MSCI World UCITS ETF USD (Acc) and the SPDR MSCI World UCITS ETF are two examples of accumulating funds.

Here's a breakdown of the fund domicile for some of the MSCI World ETFs:

The replication method is also an important consideration. Optimized sampling is one of the methods used by many MSCI World ETFs, including the iShares Core MSCI World UCITS ETF USD (Acc) and the Xtrackers MSCI World UCITS ETF 1C.

The iShares Core MSCI World UCITS ETF USD (Acc) has a fund size of 90,222 million EUR, making it one of the largest MSCI World ETFs.

The TER (Total Expense Ratio) of the iShares Core MSCI World UCITS ETF USD (Acc) is 0.20% p.a., which is relatively low compared to other ETFs in the list.

Suggestion: Ishares Core Msci Eafe Etf

Here's a list of the top 5 MSCI World ETFs by fund size:

The Amundi MSCI World UCITS ETF UCITS ETF Acc has a TER of 0.12% p.a., which is one of the lowest in the list.

The UBS ETF (IE) MSCI World UCITS ETF (USD) A-acc has a TER of 0.10% p.a., making it one of the most cost-effective MSCI World ETFs.

The MSCI World Index ETF distributes its net taxable income to investors at least once a year. These distributions can be paid in cash or reinvested in the fund.

All amounts are given in Canadian dollars. The fund's distributions consist of distributions received from its securities, minus fund expenses, plus any realized capital gains.

The fund's distributions are primarily made up of the following components: eligible dividends, non-eligible dividends, other income, capital gains, return of capital, interest income, foreign income, and foreign tax paid.

Here's a breakdown of the fund's distributions per unit for tax purposes:

Business Involvement metrics can provide a more comprehensive view of the fund's exposure to specific activities. However, these metrics are not indicative of the fund's investment objective.

Business Involvement metrics can help investors gain a more comprehensive view of specific activities in which a fund may be exposed through its investments.

These metrics are not indicative of a fund's investment objective, and they don't change a fund's investment objective or constrain the fund's investable universe.

For more information, please see the fund's prospectus, as it outlines the fund's investment strategy.

Business Involvement metrics are calculated by BlackRock using data from MSCI ESG Research, which provides a profile of each company's specific business involvement.

BlackRock leverages this data to provide a summed up view across holdings and translates it to a fund's market value exposure to the listed Business Involvement areas.

Business Involvement metrics are designed only to identify companies where MSCI has conducted research and identified as having involvement in the covered activity.

This means there could be additional involvement in these covered activities where MSCI does not have coverage.

Business Involvement metrics are only displayed if at least 1% of the fund's gross weight includes securities covered by MSCI ESG Research.

Here are some additional resources to review the MSCI methodology behind the Business Involvement metrics: Capital gains distributionsTax documentsFinancial & legalView all documents

The Premium/Discount section of the MSCI World Index ETF provides valuable insights into the fund's performance.

The 1-year total return for the ETF is 18.72%, which is a significant increase from the previous year.

The market price and benchmark returns for the 1-year period are also 18.67% and 18.67%, respectively.

The ETF's 5-year total return is 70.98%, outpacing the benchmark's 69.78%.

Here is a breakdown of the ETF's returns for different time periods:

The ETF's after-tax returns are also noteworthy, with the 1-year pre-liquidation return at 18.30% and the 1-year post-liquidation return at 11.37%.

The ETF's performance has been strong in recent years, with a total return of 18.72% in 2024, 23.93% in 2023, and 22.01% in 2021.

For more insights, see: Do Index Funds Have a High Rate of Return

The MSCI World Index ETF is a great way to invest in a broad range of developed market companies around the world.

Exposure to these companies can help you diversify your portfolio and reduce risk.

By investing in the MSCI World Index ETF, you can gain access to a large and established universe of companies, including those in the US, Europe, and Asia.

This can be especially useful for investors who want to seek long-term growth in their portfolios.