The MSCI World Index is a popular stock index representing large and mid-sized companies in 23 developed markets. However, in 2025 it suffered losses, prompting investors to seek alternative investment opportunities. What should one consider when selecting ETFs, and which ETF alternatives might perform better this year?
MSCI World Index: Overview
Composition: The MSCI World Index includes 1,353 stocks from developed markets. The USA holds the largest share at around 72%, followed by Japan, the United Kingdom, and Canada.
Index Variants: There are the price index, gross index, and net index, with the net index being the most commonly used for ETF investments as it accounts for withholding taxes on dividends.
Alternatives to the MSCI World Index
Investors looking to reduce the risk of US investments or discover new opportunities might consider the following indices:
- MSCI World ex USA Index: Offers diversification without US stocks.
- MSCI ACWI IMI Index: Includes developed and emerging markets for global diversification.
- FTSE Developed World Index: Similar to the MSCI World, but with different weighting.
- MSCI World Quality Index: Focuses on high-quality companies for stable growth.
ETFs as Alternatives
The following ETFs could replace or complement the MSCI World Index:
- Amundi MSCI World UCITS ETF (FR0010315770)
- HSBC MSCI World UCITS ETF (IE00B4X9L533)
- SPDR MSCI World UCITS ETF (IE00BFY0GT14)
- Invesco MSCI World UCITS ETF (IE00B60SX394)
These ETFs offer broad diversification and could be suitable depending on strategy and risk tolerance.
Risk Reduction and New Opportunities
To reduce risk, the MSCI World ex USA Index or the MSCI ACWI IMI Index, which also includes emerging markets, are recommended. New opportunities can be found through investments in quality stocks or specific market segments.