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  1. Knowledge
  2. ›Strategy & portfolio
  3. ›ETF overlap: why MSCI World + S&P 500 is not diversification
WissenETF overlap: why MSCI World + S&P 500 is not diversification
Wissen · Strategie & Portfolio5 Min. Lesezeit

ETF overlap: why MSCI World + S&P 500 is not diversification

Why popular index combinations offer less spread than you would think.

Investboard Redaktion·27. März 2026

Inhalt

  • The overlap problem
  • MSCI World vs. S&P 500
  • What real diversification means
  • Sensible alternatives
  • Practical recommendations
Inhaltsverzeichnis

Inhalt

  • The overlap problem
  • MSCI World vs. S&P 500
  • What real diversification means
  • Sensible alternatives
  • Practical recommendations

More funds feel like more diversification. Often they are the opposite. Hold two ETFs that buy the same companies, and you have doubled a single risk rather than spread it.

Diversification is not measured by the number of funds, but by the number of risks they spread.

The overlap problem

Many investors pair MSCI World with the S&P 500 in the belief that this makes them more broadly diversified. In truth they create a substantial concentration risk: roughly 65-70 percent of the MSCI World positions are also held in the S&P 500.

More ETFs do not automatically mean more diversification. What matters is which markets the ETFs cover, not how many ETFs sit in the portfolio.

MSCI World vs. S&P 500

CharacteristicMSCI WorldS&P 500
Countries23 developed marketsUnited States only
Positions~1,400~500

Häufige Fragen

How much overlap do MSCI World and the S&P 500 have?

Roughly 65-70 percent of the positions in the MSCI World are also held in the S&P 500. Both indices are heavily dominated by US mega-caps.

Which ETF combination offers real diversification?

A sensible combination would be, for example, MSCI World + MSCI Emerging Markets, or FTSE All-World as a single-ETF solution. What matters is that the indices cover different markets and regions.

Does ETF overlap hurt returns?

Not directly, but it creates a concentration risk. When US tech stocks fall, both ETFs are hit at the same time. The expected return is no worse, but the risk is higher than with genuine spread.

Investboard Redaktion·Aktualisiert: 27. März 2026

Dieser Artikel dient der allgemeinen Information und stellt keine Steuerberatung oder Anlageberatung dar. Für individuelle steuerliche Fragen wenden Sie sich bitte an einen Steuerberater.

Weiterführende Inhalte

Verhalten & Disziplin

Rebalancing als Disziplin, nicht als Timing

Vorabpauschale Rechner 2026

Zum Rechner →

Inhalt

  • The overlap problem
  • MSCI World vs. S&P 500
  • What real diversification means
  • Sensible alternatives
  • Practical recommendations
Inhaltsverzeichnis

Inhalt

  • The overlap problem
  • MSCI World vs. S&P 500
  • What real diversification means
  • Sensible alternatives
  • Practical recommendations
US share
~70 percent
100 percent
Top 10 weighting~25 percent~35 percent
Emerging marketsNoNo

The ten largest positions in both indices are nearly identical: Apple, Microsoft, Amazon, Nvidia and other US mega-caps dominate each of them.

What real diversification means

Real diversification means the holdings are spread across different sources of risk:

  • Regions: not only the United States and Europe, but also emerging markets and Asia-Pacific
  • Company sizes: large caps, mid caps and small caps
  • Asset classes: equities, bonds, commodities, real estate

A single MSCI World covers only large and mid caps in developed markets: no emerging markets and no small caps.

At its core

Two ETFs on the same markets are not a second leg to stand on. They are the same leg, counted twice.

Sensible alternatives

CombinationCoverageOverlap
MSCI World + S&P 500Developed markets (US doubled up)~70 percent
MSCI World + MSCI EMDeveloped and emerging markets0 percent
FTSE All-World (1 ETF)Developed and emerging marketsn/a
MSCI ACWI IMI (1 ETF)All countries + small capsn/a

Single-ETF solutions such as FTSE All-World or MSCI ACWI are the simplest and most effective choice for most investors. No rebalancing, no overlap, maximum spread.

Practical recommendations

  • Check your portfolio for overlaps before you add new ETFs
  • Less is often more: one broadly diversified ETF beats three that overlap
  • If you want to weight by region, choose indices with no shared holdings
  • Pay attention to the actual country distribution, not just the index name

Kernaussagen

  • MSCI World and S&P 500 overlap by roughly 70 percent, which is not real diversification
  • Real spread requires different regions and asset classes
  • Single-ETF solutions (FTSE All-World, MSCI ACWI) avoid the problem elegantly
  • More ETFs do not automatically mean less risk

Make overlap visible

Investboard checks your portfolio for markets you hold twice over and shows how much real spread sits behind the number of funds.

Check your portfolio for overlap →