Antoine Bouvy
04 Jun 2025
Global ETF: A comparison between MSCI World and S&P 500 to make the right choice in 2025
The global ETF is a popular investment vehicle for portfolio diversification. Among the many available ETFs, the most widely used is the one tracking the MSCI World index. But is it more appealing than the S&P 500, which is often praised for its performance? Let us compare these two options to help you make an informed decision.
What is a global ETF?
A global ETF is an exchange-traded fund that allows investors to access a wide range of global stocks in a single product. Unlike a sector or regional ETF, a global ETF aims for maximum geographic diversification.
There are several types of global ETFs:
- MSCI World: developed markets
- FTSE All-World: developed and emerging markets
- MSCI ACWI: all countries worldwide
To simplify the comparison, we will focus on the MSCI World ETF, the most popular choice among individual investors seeking global diversification.
See also: “World ETF, a good choice to diversify your portfolio”
What is the MSCI World?
The MSCI World is a global stock market index that includes over 1,500 large and mid-cap companies from 23 developed countries. Created by Morgan Stanley Capital International (MSCI) in 1969, it is a key benchmark for tracking global equity markets.
This index represents around 85% of the free-float-adjusted market capitalization of each included country. It provides a broad view of developed markets. American companies make up about 70% of the index, followed by Japanese, British and French companies.
Geographic breakdown of the MSCI World
- North America: about 70%, mainly the United States
- Europe: about 20%
- Asia-Pacific: about 10%
The index is reviewed quarterly to reflect changes in markets and company sizes.
What is the S&P 500?
The S&P 500, created in 1957, is a US stock market index that includes 500 of the largest publicly traded companies in the United States. It is managed by S&P Dow Jones Indices and represents about 80% of the total US market capitalization.
Unlike other indices like the Dow Jones Industrial Average, the S&P 500 is weighted by market capitalization. This means companies with higher market value have more weight in the index, which is similar to the MSCI World methodology.
Sectors represented in the S&P 500
- Technology: about 28%
- Healthcare: about 13%
- Financials: about 12%
- Consumer discretionary: about 10%
- Communication services: about 8%
- Industrials: about 8%
- Other sectors: about 21%
The S&P 500 is updated regularly by a committee using strict criteria based on market capitalization, liquidity and profitability.
MSCI World vs S&P 500: the key differences
| Criteria | MSCI World | S&P 500 |
|---|---|---|
| Covered region | Developed countries | United States only |
| Number of stocks | About 1,500 | 500 |
| Geographic weighting | 70% US, 30% rest of world | 100% US |
| Diversification | High: countries and sectors | Moderate: sectors only |
| Currency exposure | Yes: euro, yen, pound and others | No: US dollar only |
The MSCI World ETF offers global diversification, while the S&P 500 focuses only on major US companies.
“My investment principle is that the three most important things are: diversify, diversify, diversify.”
— William F. Sharpe, Nobel Prize in Economics
Historical performance: 5, 10, 15 and 20 year comparison
Below is a comparison of annualized returns, net of fees (TER), using the US dollar versions of the MSCI World and S&P 500 as of December 31, 2024:
| Period | MSCI World | S&P 500 |
|---|---|---|
| 5 years | +10.4% | +13.2% |
| 10 years | +8.6% | +11.0% |
| 15 years | +9.1% | +10.9% |
| 20 years | +7.6% | +9.6% |
Analysis: The S&P 500 has historically outperformed the MSCI World, largely due to the strength of US tech giants like Apple, Microsoft and NVIDIA in recent years. However, the MSCI World is more diversified and may be more resilient to economic shocks specific to the United States.
How to choose between MSCI World and S&P 500?
| Decision criteria | Choose MSCI World ETF | Choose S&P 500 ETF |
|---|---|---|
| You want international exposure | ||
| You want to reduce dollar-related risk | ||
| You want a liquid and well-known ETF | ||
| You prioritize historical performance | ||
| You are starting with just one ETF in your portfolio |
Easyvest’s approach: invest in a global ETF with simplicity
Several ETFs track the MSCI World index, and they are available through most online brokers. However, selecting the right ETF, handling allocations, managing taxes and rebalancing can quickly become overwhelming for beginners.
This is where Easyvest comes in.
We offer a simple, transparent and low-cost solution for long-term investing without the hassle of managing technical details yourself.
Our index-based portfolios include two main components:
- A global ETF to provide broad exposure to developed market equities
- A eurozone bond ETF to stabilize the portfolio based on your risk profile
This combination delivers optimal diversification, backed by a proven passive investment strategy aligned with leading academic standards.
“At Easyvest, we believe in passive, transparent and evidence-based investing. Choosing a global ETF allows you to benefit from global growth while minimizing costs.”
— Matthieu Remy, CEO of Easyvest
Strong long-term performance
Our portfolios have historically delivered solid returns, tailored to all types of investors from conservative to aggressive profiles.
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FAQ: Frequently asked questions about global ETFs
Is there a worldwide ETF?
Yes, several worldwide ETFs provide broad exposure to global stock markets. The most popular are the FTSE All-World and MSCI ACWI ETFs. These funds include companies from both developed and emerging markets, giving investors access to thousands of stocks across more than 40 countries in a single investment.
Is there a world ETF excluding the US?
Yes, you can invest in a world ETF excluding the US. These ETFs are designed to give you exposure to global markets while avoiding US-based companies. Examples include the MSCI World ex USA and FTSE All-World ex US ETFs. They are useful if you are already heavily exposed to the US market or want to diversify away from it.
What is the longest running global ETF?
The oldest global ETF is the iShares MSCI World ETF (ticker: URTH) in the United States, launched in 2012. However, in Europe, the iShares MSCI World UCITS ETF (ticker: SWDA) has been available since 2009. While these may not seem very old, global ETFs are a relatively recent innovation compared to US-focused ETFs like the SPDR S&P 500 ETF, which dates back to 1993. Despite their shorter history, global ETFs have quickly become a core tool for long-term diversified investing.