Best MSCI World ETF: The ultimate comparison for 2025
Would you like to invest in global markets and spread your risk widely? The MSCI World ETF is one of the most popular options for investors looking for a solid investment without having to worry about managing a broad equity portfolio.
In this detailed article, you will learn why the international equity fund is such an attractive choice, what historical returns it has achieved, and how experts rate this index fund. We also offer you a comparison of the best ETFs on the MSCI World Index.
In brief:
- The MSCI World is a stock index that tracks over 1,500 large and medium-sized companies from 23 industrialised countries.
- It offers global diversification and gives you the opportunity to invest in various industries and countries around the world.
- Long-term returns: Historically, the Global Index Fund has generated an annual return of around 9%.
- There are many exchange-traded global funds with different cost structures, replication methods and fund volumes. This article shows you which ETFs are particularly worthwhile.
What is the MSCI World ETF?
The MSCI World Index, launched in 1969 by Morgan Stanley Capital International, is one of the leading global equity indices and covers the economic performance of industrialised countries.
It comprises over 1,500 large and medium-sized companies from 23 developed countries, including economic heavyweights such as the USA, Japan, Great Britain, Canada and Germany.
The index is weighted by market capitalisation, which means that particularly large US companies such as Apple, Microsoft and Amazon account for around 70% of the index volume, reflecting the dominance of the US market in the global stock market.
In addition to the US, companies from Japan and the UK (each accounting for 5-8% of the index) and German corporations such as SAP and Siemens contribute to the index, even though Germany only accounts for around 2.5%.
The index thus covers approximately 85% of the global market capitalisation of industrialised countries and is adjusted quarterly to reflect current market dynamics.
Why is the MSCI World global equity fund so popular?
Thanks to its broad geographical and sector diversification, the MSCI World covers a wide range of industries, including technology, healthcare, finance and industry.
The broad diversification minimises the risk that would exist when investing in individual countries or sectors and enables investors to benefit from global economic development.
The ETF return on the MSCI World has historically shown stable growth rates, making it particularly attractive for long-term investors.
An ideal ETF for beginners combines the following advantages:
- Broad diversification: The Morgan Stanley Capital International World ETF covers almost 85% of global market capitalisation, thereby reducing the risk associated with investing in just one region or sector. If economic challenges arise in one country, these losses can often be offset by the other countries in the index.
- Low costs: Compared to actively managed funds, index funds have low fees. Most exchange-traded global funds have a total expense ratio (TER) of between 0.12% and 0.20%, making them cost-effective and more profitable.
- Easy access to the global economy: Investors who open a securities account can easily invest in Morgan Stanley Capital International World, thereby gaining access to the global economy.
This combination of broad diversification, low costs and long-term growth potential has made global index funds a core investment that is attractive to both novice and experienced investors.
Good to know:
The 70/30 portfolio, consisting of 70% developed market stocks (typically MSCI World) and 30% emerging market stocks (typically MSCI Emerging Markets), is indeed often recommended as a strategy for a diversified global portfolio.
Composition of the MSCI World ETF
In addition to the US, important markets from Europe and the Asia-Pacific region are also represented in the Morgan Stanley Capital International World Index Fund. Europe accounts for around 20% of the index and includes strong economies such as Germany, France and the United Kingdom.
Companies such as Siemens, Nestlé and L’Oréal lead the way among European companies, operating in various sectors such as industry, consumer goods and healthcare.
Japan dominates the Asia-Pacific region, accounting for around 6% of the index. Companies such as Toyota and Sony contribute significantly to the region’s economic strength, particularly in the automotive and technology sectors. Australia and Hong Kong also play an important role in this region.
One key strength of the broadly diversified global fund is its diversification across different sectors. The largest sector in the index is technology, which accounts for around 22% of the total value.
Leading technology companies contribute significantly to the overall return thanks to their strong growth. In addition to technology, financial services providers, which account for around 14% of the index, as well as healthcare companies and industrial companies also play a major role.
| Region | Countries represented | Share in the index | Examples of leading companies | Main industries |
| America | United States, Canada | ~70 % | Apple, Microsoft, Amazon, Royal Bank of Canada | Technology, Consumer Staples, Financial Services |
| Europa | Germany, France, Great Britain, Switzerland, Spain, Sweden, Belgium, Finland, Norway, Denmark, Italy, Portugal, Ireland | ~20 % | Siemens, Nestlé, L’Oréal, Unilever | Industry, Consumer Goods, Healthcare |
| Middle East | Israel | < 1 % | Check Point Software, Teva Pharmaceuticals | Technology, healthcare |
| Asia/Pacific | Japan, Australia, Hong Kong, New Zealand, Singapore | ~10 % | Toyota, Sony, BHP Group, AIA Group | Automotive, technology, raw materials |
Good to know:
This broad positioning gives the Morgan Stanley Capital International World a stable and low-risk way to invest globally. The strong presence of the tech sector and leading US companies means there’s lots of potential for growth, while diversification across Europe and Asia spreads the risk.
The following chart shows the sector weightings of the MSCI World.
Historical returns of the MSCI World: Why is this a worthwhile long-term investment?
The historical performance of the Morgan Stanley Capital International World Index demonstrates why it is so popular with investors worldwide. Since its inception in 1969, the index has achieved an average annual return of 9.55%.
This has shown that broadly diversified global funds often recover quickly after economic crises such as the financial crisis of 2008 or the coronavirus crash of 2020. A long-term investment horizon is particularly beneficial here.
The advantages of Morgan Stanley Capital International World ETF at a glance:
- Stable returns: The average annual return is around 9%. This stability makes it an attractive investment for long-term investors.
- Crisis resilience: Despite setbacks in times of crisis, the MSCI World Index has managed to recover every time. So if you invest in this index fund for the long term, you will benefit from the global growth trend while minimising risk.
- Sample calculation: If you had invested £10,000 in a global index fund 20 years ago and not withdrawn any profits, you would now have more than £55,000, assuming an average return of 9%.
The Morgan Stanley Capital International World ETF is therefore particularly well suited to investors who want to build a stable, growing portfolio and are looking for a broadly diversified international investment. The long-term ETF investment strategy is ideal for a family portfolio or an investment plan that will remain in place for generations and can serve as a kind of ETF pension insurance.
Which global equity fund is the best?
Choosing the best global ETF is a decision that depends heavily on your individual investment goals, cost preferences and risk assessments.
Comparing different criteria is crucial to finding the right product for long-term growth and cost efficiency.
Good to know:
It is not only worth comparing different ETFs, but also brokers. For example, the Trade Republic new customer bonus is a compelling reason to switch providers and thereby increase your returns in the long term.
1. Costs (total expense ratio, TER)
The total expense ratio (TER) is a key indicator of the efficiency of an index fund and shows how much you pay in management fees each year.
This amount is deducted directly from the fund’s assets and therefore affects the net return you receive. For Morgan Stanley Capital International World ETFs, the TER is usually between 0.12% and 0.20%.
A lower ETF TER means a higher return for investors in the long term, as less capital is spent on management costs.
Comparison of the TERs of the most important Morgan Stanley Capital International World Funds:
- iShares Core MSCI World UCITS ETF: 0,20 %
- Xtrackers MSCI World UCITS ETF: 0,19 %
- Amundi MSCI World UCITS ETF: 0,20 %
- HSBC MSCI World UCITS ETF: 0,15 %
The HSBC MSCI World UCITS ETF is particularly attractive here, as it has the lowest TER at 0.15%. Over many years, this small difference can have a significant impact on the overall return.
A stock fund with a TER that is 0.05% lower can generate an additional return of around €300 on an investment of €10,000 over 20 years, which makes the cost differences in the selection particularly relevant.
Good to know:
When selecting an index fund, look for a low TER. ETFs such as the HSBC Morgan Stanley Capital International World UCITS ETF with a low TER have a long-term advantage and ensure that more of your investment actually goes towards building your capital.
2. Fund volume and liquidity
The fund volume provides a clear indication of an ETF’s popularity and its liquidity in the market. A fund with a high volume often has lower trading costs, as market liquidity and trading volume tend to be higher.
This can be particularly relevant for investors who trade regularly, as they can expect tight spreads and lower transaction costs.
A high fund volume also indicates that the index fund enjoys long-term acceptance on the market and offers a certain degree of stability.
Comparison of the fund volumes of the leading global equity funds:
- iShares Core MSCI World UCITS ETF: 52,4 billion EUR
- Xtrackers MSCI World UCITS ETF: 8,97 billion EUR
- Amundi MSCI World UCITS ETF: 3,44 billion EUR
- HSBC MSCI World UCITS ETF: 5,69 billion EUR
The iShares Core MSCI World UCITS ETF stands out here, as it has an extremely high fund volume of €52.4 billion, making it the most liquid and most frequently traded Morgan Stanley Capital International World ETF on the market.
This ETF is particularly suitable for traders who use short-term strategies such as swing trading or who want to make frequent changes to their portfolio due to its high liquidity.
Choose a stock fund with a high fund volume, such as the iShares Core MSCI World UCITS ETF, to benefit from reliable liquidity and low trading costs. A high fund volume also signals that the ETF is considered safe and trustworthy by many investors.
3. Replication method: physical or synthetic?
The replication method describes how the international equity fund is replicated. There are two main methods: physical and synthetic replication.
- Physical replication: Equity funds that use physical replication actually purchase the stocks included in the index. This ensures transparency and minimises risks that may arise from counterparties. Physically replicating ETFs are considered particularly safe and are structured transparently. Both the iShares Core MSCI World UCITS ETF and the HSBC MSCI World UCITS ETF use this method.
- Synthetic replication: With this method, the ETF uses derivatives to replicate the index performance without buying the actual stocks. The Xtrackers MSCI World UCITS ETF is an example of a synthetically replicated ETF. Synthetic equity funds can reduce costs through lower management fees, but are less secure due to counterparty risk.
The choice between physical and synthetic replication depends on individual risk tolerance and investment strategy. Long-term investors often prefer physical replication because it offers transparency and is based on ownership of actual stocks.
4. Dividend distribution and tax optimisation
Some international equity funds distribute dividends (distributing), while others reinvest them directly (accumulating).
- Accumulating equity funds: Here, dividends are automatically reinvested, which promotes the compound interest effect and leads to higher capital accumulation in the long term.
- Distributing funds: Investors receive regular dividend payments. These are suitable for investors who prefer regular passive income.
The tax treatment of accumulating and distributing index funds may vary depending on the country and individual tax circumstances.
In Germany, accumulating equity funds benefit from a tax advantage, as the reinvestment of dividends supports tax deferral.
Good to know:
If you are investing for the long term, an accumulating ETF such as the iShares Core MSCI World UCITS ETF can offer tax advantages. This could help you build your wealth through the power of compound interest.
This table shows the most important Morgan Stanley Capital International World equity funds in direct comparison and highlights the differences in costs, fund volume, replication method and distribution type.
| ETF Name | ISIN | TER | fund volume | Replication | Distribution |
| iShares Core MSCI World UCITS ETF | IE00B4L5Y983 | 0,20 % | EUR 52.4 billion | Physical | Accumulative |
| Xtrackers MSCI World UCITS ETF | IE00BJ0KDQ92 | 0,19 % | EUR 8.97 billion | Synthetic | Accumulative |
| Amundi MSCI World UCITS ETF | LU2572257124 | 0,20 % | 3.44 billion EUR | Physical | Accumulative |
| HSBC MSCI World UCITS ETF | IE00B4X9L533 | 0,15 % | 5.69 billion EUR | Physical | Accumulative |
Conclusion: Is the MSCI World ETF your basic investment for long-term success?
The MSCI World ETF could be an excellent choice if you want to invest in the global economy for the long term and with stability.
Its broad diversification, low costs and strong growth potential make it an attractive component of a balanced portfolio. Investors seeking to build long-term wealth and expecting reliable returns stand to benefit particularly from this investment strategy.
The best Morgan Stanley Capital International World Equity Funds are characterised by low costs, high fund volumes and physical replication.
The iShares Core MSCI World UCITS ETF and the Xtrackers MSCI World UCITS ETF in particular offer a good mix of stability and returns. With an ETF savings plan, you can start with small amounts and build up considerable assets over the long term.
FAQ – Frequently asked questions about the best MSCI World ETF
