---
title: "MSCI World vs. FTSE All-World: the difference that counts"
description: "MSCI World or FTSE All-World? The structural difference (emerging markets, positions), what it means in practice, and three ways to build a world portfolio."
canonical: "https://investboard.de/en/wissen/msci-world-vs-ftse-all-world"
language: "en"
published: "2026-07-09"
modified: "2026-07-09"
last_verified: "2026-07-27"
author: "David Bartas"
author_url: "https://investboard.de/ueber-uns"
reviewer: "David Bartas"
reviewed: "2026-07-27"
---

# MSCI World vs. FTSE All-World: the difference that counts

Both are named for the world; only one means all of it. The choice is above all a decision about emerging markets.

## In short

The MSCI World covers 23 developed markets (roughly 1,400 positions); the FTSE All-World adds emerging markets (more than 4,000 positions, emerging-market share around a tenth). Both weight by market capitalisation and neither holds small caps. The choice is therefore mainly the decision whether emerging markets enter the portfolio automatically or get weighted separately and deliberately.

- MSCI World covers 23 developed markets (~1,400 positions); FTSE All-World adds emerging markets (more than 4,000)
- Both weight by market capitalisation; US mega-caps dominate both, small caps are absent from both
- The All-World is the maintenance-free one-fund solution; World + EM achieves the same with your own weighting and rebalancing
- After the index choice, tracking difference, costs and fund size decide between the concrete ETFs

Two indices carry almost the same claim in their names: the world. The difference lies in a word missing from one of them: emerging markets. Choosing between MSCI World and FTSE All-World is above all a decision on whether China, India and Brazil are represented in your portfolio.

The choice is not a question of right or wrong but a deliberate boundary decision. Three comparisons cover it completely.

> At MSCI, "World" means developed markets. Whoever means the whole world needs the All-World, or adds emerging markets separately.

## The structural difference

The **MSCI World** covers large and mid-sized companies from 23 developed markets, roughly 1,400 positions. Emerging markets are absent entirely; MSCI keeps them in its separate Emerging Markets index.

The **FTSE All-World** covers large and mid-sized companies from developed **and** emerging markets, more than 4,000 positions in total. The emerging-market share sits, market-dependent, at around a tenth of the index.

| Characteristic | MSCI World | FTSE All-World |
| --- | --- | --- |
| Coverage | 23 developed markets | Developed and emerging markets |
| Positions | ~1,400 | more than 4,000 |
| Emerging markets | No | Yes, around a tenth (market-dependent) |
| Small caps | No | No |
| Weighting | Market capitalisation | Market capitalisation |

Both indices weight by market capitalisation. The same US mega-caps therefore dominate both, and the US share is high in both; in the All-World it comes out somewhat lower through the emerging-market admixture. Neither contains small caps; whoever wants them needs variants such as the MSCI ACWI IMI.

## What the difference means in practice

**Return:** whether the emerging-market admixture helps or costs in future, nobody knows; historical stretches ran for and against emerging markets in turn. The choice is a diversification decision, not a return decision.

**Diversification:** the All-World spreads across more countries and more positions. That lowers the weight of any single economy outside the US only moderately, but it takes the decision off your hands whether, and how much, emerging markets belong in the portfolio.

**Maintenance:** an All-World is a one-fund solution with no rebalancing to do. The alternative, MSCI World plus a separate emerging-markets ETF, reaches the same coverage with a freely chosen weighting, but demands your own rebalancing.

MSCI World plus MSCI Emerging Markets do not overlap: the pairing is the modular version of the All-World idea. What causes trouble is pairing two indices with a large intersection, such as MSCI World plus the S&P 500.

## Three ways to build a world portfolio

- **FTSE All-World (or MSCI ACWI):** one position, world coverage including emerging markets, no upkeep. The simplest form.
- **MSCI World + Emerging Markets:** two positions, weighting set by you (classically discussed around 70/30 to 90/10), annual rebalancing required.
- **MSCI World alone:** a deliberate decision against emerging markets, and not a wrong one, provided it is made consciously and written into your investment mandate.

## What matters in the implementation

Only after the index choice does the product comparison begin: tracking difference, TER, fund size and distribution policy often separate the concrete ETFs on the same index more than the index question itself. Both index families are tracked by large providers with liquid, inexpensive ETFs; for German tax, both count as equity funds with the 30% partial exemption.

The question is not which index calculates better. The question is whether you leave the emerging-markets decision to the index or take it yourself.

## Frequently asked questions

### What is the difference between MSCI World and FTSE All-World?

The MSCI World holds large and mid-sized companies from 23 developed markets (roughly 1,400 positions) and no emerging markets. The FTSE All-World covers developed and emerging markets (more than 4,000 positions); the emerging-market share sits, market-dependent, around a tenth. Neither contains small caps.

### Is the FTSE All-World better than the MSCI World?

Not as a rule. The choice is a diversification decision, not a return decision: whether the emerging-market admixture will help in future, nobody knows. The All-World is the maintenance-free one-fund solution; MSCI World plus a separate emerging-markets ETF reaches the same coverage with your own weighting, but demands rebalancing.

### Can I combine MSCI World and FTSE All-World?

Little is gained by it: the two overlap heavily, because the All-World contains the MSCI World's developed markets almost completely. Disjoint pairings such as MSCI World plus Emerging Markets make more sense, or simply one of the two world solutions on its own.

## Sources

- [MSCI World Index (Indexübersicht und Factsheet)](https://www.msci.com/indexes/index/990100) · MSCI
- [FTSE All-World Index Factsheet](https://research.ftserussell.com/Analytics/FactSheets/Home/DownloadSingleIssue?issueName=AWORLDS) · FTSE Russell
- [InvStG § 20 Teilfreistellung](https://www.gesetze-im-internet.de/invstg_2018/__20.html) · Bundesministerium der Justiz