Antoine Bouvy
28 Mar 2025
What is the MSCI World Index and how can I buy it?
Learn all about the MSCI World Index and how you can invest in it. This comprehensive guide covers everything you need to know.
What is the MSCI World Index?
The MSCI World Index is a stock market index that tracks the performance of large and mid-cap stocks across 23 developed countries worldwide. It is a benchmark for global equity investors, and it provides a comprehensive view of the stock market performance of developed countries. The index is weighted by market capitalization, meaning that the largest companies have a greater impact on the index's performance. The MSCI World Index includes companies from a wide range of industries, including technology, healthcare, financials, and consumer goods.
What does MSCI stand for?
MSCI stands for Morgan Stanley Capital International. It’s a financial company that creates some of the world’s most widely used stock market indices. An MSCI index is a benchmark that tracks the performance of a specific group of stocks—often across countries, regions, or sectors. For example, the MSCI World Index includes over 1,500 large and mid-sized companies. Other indices from MSCI track emerging markets, specific industries, or sustainable investments. These indices are commonly used as the foundation for ETFs, making it easier for investors to get broad exposure to global markets in a single investment. At Easyvest, we use ETFs based on MSCI indices because they offer smart diversification, transparency, and efficiency—exactly what long-term investing needs.
History of the MSCI World Index
The MSCI World Index was first introduced in 1969, and it has since become one of the most widely recognized benchmarks for global equity investors. Over the years, the index has undergone several changes, including the addition of new countries and the removal of others.
How is the MSCI World Index constructed?
The MSCI World Index is constructed using a free float market capitalization methodology, which means that only the shares that are available for trading in the market are taken into account. The index is reviewed quarterly and rebalanced semi-annually to ensure that it accurately represents the stock market performance of developed countries worldwide.
How can I buy the MSCI World Index?
Investors can gain exposure to the MSCI World Index by investing in exchange-traded funds (ETFs) that track the index. There are several ETFs that track the MSCI World Index, and they are available through most online brokers. If you don't want to manage this yourself, Easyvest is a simple and inexpensive solution. Its index portfolios consist of a global equity ETF and a Eurozone bond ETF and offer remarkable long-term performance.
Is MSCI World a good investment?
The MSCI World Index is often seen as a solid foundation for long-term investing, thanks to its broad global diversification. It tracks over 1,500 large and mid-sized companies across 23 developed countries, giving investors exposure to a wide range of sectors and regions in a single product. Because of this built-in diversification, many investors view ETFs that follow the MSCI World Index as a simple and efficient way to invest globally. It helps reduce the risk of being overly exposed to one country or company, while still participating in the growth of major global economies. That said, no investment is without risk. The MSCI World Index focuses on developed markets, so it doesn’t include emerging economies, which some investors may want for additional growth potential. As always, whether it’s a good fit depends on your personal goals, time horizon, and risk tolerance. At Easyvest, we often use ETFs based on the MSCI World Index as part of our long-term investment strategy—because they align well with our philosophy of smart, diversified, and cost-efficient investing.
Historical performance of the MSCI World Index
The simulator below allows you to measure the historical performance of the MSCI World, and even more: taking into account your appetite for risk, the tool will give you the past performance of an index portfolio adapted to your profile, as suggested by Easyvest.
Advantages of investing in the MSCI World Index
Investing in the MSCI World Index provides investors with exposure to a broad range of developed countries worldwide. This diversification helps to reduce risk and can provide a more stable return over the long term. Additionally, because the index is weighted by market capitalization, investors are investing in the largest and most established companies in each country.
Risks of investing in the MSCI World Index
As with any investment, there are risks associated with investing in the MSCI World Index. Because the index is weighted by market capitalization, investors are exposed to a greater degree of risk in the largest companies. Additionally, because the index is composed of companies from developed countries, it may not provide exposure to emerging markets or smaller companies that may offer greater growth potential.
Conclusion
The MSCI World Index is a popular stock market index that provides investors with exposure to large and mid-cap stocks across developed countries worldwide. Investing in the index through ETFs is a simple and cost-effective way to gain exposure to a broad range of companies. As with any investment, there are risks associated with investing in the index, but its diversification and exposure to established companies make it an attractive option for many investors.
FAQs
Which markets does the MSCI World Index cover?
The MSCI World Index covers 23 developed markets across North America, Europe, and the Asia-Pacific region. It includes large and mid-sized companies from countries like the United States, Canada, the United Kingdom, Germany, France, Japan, Australia, and others. In total, the index tracks over 1,500 companies, offering exposure to a wide range of sectors and industries. It’s designed to reflect the performance of the world’s most established economies, making it a popular choice for investors seeking broad international diversification. However, it’s important to note that the MSCI World Index does not include emerging markets like China, India, or Brazil. Investors who want exposure to those regions often combine it with an ETF that tracks the MSCI Emerging Markets Index.
Does the MSCI pay dividends?
Yes, the companies included in the MSCI World Index do pay dividends—many of them are large, established firms that regularly distribute part of their profits to shareholders. However, whether you, as an investor, receive those dividends depends on the type of ETF you’re investing in. Some MSCI World ETFs are distributing, meaning they pay out the dividends directly to investors. Others are accumulating (or capitalizing), meaning they automatically reinvest those dividends back into the fund, helping your investment grow over time. At Easyvest, we typically favor accumulating ETFs because they’re more efficient from a cost and tax perspective—especially over the long term. So while the index itself doesn’t “pay” dividends, the companies within it do—and depending on the ETF structure, you may benefit from them either through payouts or reinvestment.
What is the MSCI World Index?
The MSCI World Index is a stock market index that tracks the performance of large and mid-cap stocks across 23 developed countries worldwide.
How is the MSCI World Index constructed?
The MSCI World Index is constructed using a free float market capitalization methodology, which means that only the shares that are available for trading in the market are taken into account.
Can I invest in the MSCI World Index?
Yes, investors can gain exposure to the MSCI World Index by investing in exchange-traded funds (ETFs) that track the index.
What are the advantages of investing in the MSCI World Index?
Investing in the MSCI World Index provides investors with exposure to a broad range of developed countries worldwide. This diversification helps to reduce risk and can provide a more stable return over the long term.
What are the risks of investing in the MSCI World Index?
Because the index is weighted by market capitalization, investors are exposed to a greater degree of risk in the largest companies.