The Search for Better Returns
The MSCI World Index disappointed in 2025 with its results, prompting investors to look for alternative ETFs that offer not only better returns but also reduced risk from US stocks.
1. MSCI Emerging Markets ETF
This ETF expands the country universe to 47 states, including China, India, Taiwan, and Brazil. Although it benefits from the growth of emerging markets in the long run, it currently lags behind the MSCI World by about two percent with a plus. Geopolitical tensions and corrections in India and Taiwan are weighing on this index.
2. MSCI World Equal Weighted ETF
In this ETF, all companies have the same weight, reducing the US share to about 40 percent while Japan, the UK, and Canada gain influence. The ETF’s performance in 2025 is about 0.4 percent negative, which is still better than the MSCI World. However, frequent reallocations lead to higher ongoing costs.
3. MSCI World ex USA ETF
This ETF excludes US stocks and has clearly outperformed in 2025. The largest positions are in Japan, the UK, and Canada, with a dominance in the finance and industry sectors. The ETF achieved about 6.5 percent in euros and about 18 percent in US dollars, which is also attributed to a weak US dollar.
4. Additional Alternatives
The MSCI ACWI IMI ETF offers broader diversification, including emerging markets and small-cap stocks. The FTSE Developed World Index ETF resembles the MSCI World but may differ in weighting and composition. These alternative ETFs present new opportunities for private investors, especially by reducing US risk.