Four ETF Alternatives to the MSCI World Index
The MSCI World Index has suffered losses this year, making it less attractive to investors. This has led to increased interest in alternative ETFs that offer better returns and reduce the risk associated with US stocks. Here are four powerful ETF alternatives that private investors and retail investors might consider:
1. iShares Core MSCI World ex USA ETF
- Description: This ETF invests in stocks outside the USA, diversifying the risk and reducing dependence on US markets.
- Advantages: Provides access to international markets, which increases diversification and reduces risk.
- Returns: The MSCI World ex USA Index showed strong performance in 2025, with a 3-month return of 9.22% and an annual return of 24.42% (as of May 30, 2025).
2. iShares MSCI World Quality ETF
- Description: Focuses on companies with high quality attributes, such as high profitability, low debt, and stable cash flow.
- Advantages: This strategy can be more stable in turbulent markets and offers consistent returns in the long term.
- Returns: The MSCI World Quality Index had a return of 4.64% in the last month, but a negative 3-month return of -0.49% (as of May 30, 2025).
3. Vanguard FTSE All-World UCITS ETF
- Description: A diversified ETF that invests in stocks from around the world, including the USA.
- Advantages: Offers comprehensive diversification across different regions and sectors.
- Returns: Although specific returns for this ETF are not listed, it is known for its cost-effective and broad diversification.
4. SPDR MSCI ACWI IMI ETF
- Description: Invests in stocks from developed and emerging markets, providing comprehensive global diversification.
- Advantages: Includes both large and small companies, allowing for broader market coverage.
- Returns: Again, no specific returns are available, but the focus on global diversification can reduce risk.
These ETFs offer investors the opportunity to diversify their portfolios and reduce the risk associated with a concentration on the MSCI World Index. They are particularly suitable for private investors and retail investors seeking stable and diversified investment options.