Indexy a trhy
FTSE All-World vs. MSCI ACWI: Which Global Index Is Better?
Key takeaways
- FTSE All-World and MSCI ACWI are very similar — both cover developed and emerging markets and the US dominates with a weight of around 60–65%.
- The main difference lies in the classification of South Korea and Poland: FTSE places them among developed markets, MSCI among emerging markets.
- For long-term passive investors, the choice between them is marginal in terms of performance — more important are costs and availability of ETFs at your broker.
- Both indices can be bought through Irish UCITS ETFs — the accumulating version is advantageous for Czech investors from a tax perspective.
FTSE All-World and MSCI ACWI are de facto competitors in the category of global equity indices covering developed and emerging markets — and for a passive investor the choice between them is more a question of ETF availability than performance.
What both indices include
Both aim to capture the global equity asset class. FTSE All-World covers approximately 4,000 companies from more than 50 countries, MSCI ACWI approximately 2,800 companies from 47 countries. The difference in company count stems from different approaches to small companies and inclusion thresholds.
The US makes up the largest share in both indices — around 60–65% of the weight. Japan, the United Kingdom, France, and Canada are the other major players.
The key difference: South Korea and Poland
This is where the indices differ most noticeably. FTSE classifies South Korea as a developed market, while MSCI keeps it in the emerging category. The practical impact: if you hold an MSCI World ETF and want to cover the whole world, you need an emerging markets component that includes South Korea. With FTSE All-World, South Korea is included automatically.
Poland: FTSE places it among developed markets, MSCI among emerging. This is an interesting point for the Czech context — the Polish market is geographically close.
How to buy them as a Czech investor
- FTSE All-World: the best-known ETF comes from Vanguard
- MSCI ACWI: the best-known ETF comes from iShares
- Both available as Irish UCITS ETFs (ISIN "IE")
- Recommended variant for the Czech Republic: accumulating fund (automatically reinvests dividends)
More on the benefits of accumulating funds in the article accumulating vs. distributing ETF. Context on global indices is added in the All-World vs. S&P 500 comparison.
FAQ
What is the difference between FTSE All-World and MSCI ACWI?
Both cover the global equity market including developed and emerging countries. The main difference: FTSE classifies South Korea and Poland as developed markets, MSCI has them in emerging markets. The performance difference has historically been minimal.
Which is better for a passive investor?
From a long-term perspective they are very similar in performance. More important are ETF costs (TER) and availability at your broker. Choose the cheaper of the available options and hold it consistently.
Why do both indices have so many US stocks?
Because the US equity market is the world's largest. Companies like Apple, Microsoft, or Nvidia have enormous market capitalisation. An index weighted by market capitalisation simply reflects where the money is — and a large portion of it is in the US.
Is the accumulating or distributing variant better for a Czech investor?
The accumulating version reinvests dividends automatically without a taxable event. In the Czech Republic dividends are subject to 15% tax, so an accumulating fund minimises the tax burden and takes full advantage of compound growth.