MSCI World ETFs are one of the most efficient and popular solutions for investors who want to diversify their portfolio on a global scale with a single financial instrument. These ETFs replicate the MSCI World Index, an index that includes over 1,500 large-cap companies from 23 developed countries, including the United States, Europe, Japan and Australia.
One of the main advantages of MSCI World ETFs is their high diversification, which allows you to invest in a wide range of sectors and companies without having to buy individual securities. Thanks to this characteristic, they are particularly suitable for those who want a balanced exposure to global financial markets, reducing the specific risk of individual countries or industries.
In this guide, we will analyze the best MSCI World ETFs available in 2025, comparing performance, costs, replication strategies and other key features to help you choose the fund best suited to your investment needs.
What is the MSCI World Index?
The MSCI World Index is one of the most widely used global equity indices by investors to gain diversified exposure to developed markets. Created by MSCI (Morgan Stanley Capital International), this index tracks the performance of over 1,500 large and mid-cap companies from 23 developed countries.
The MSCI World is composed of leading global companies, distributed across various sectors, including technology, finance, healthcare and consumer goods. The top positions of the index are usually occupied by giants such as Apple, Microsoft, Amazon, Alphabet (Google), Nvidia and Tesla, underlining the strong weight of the technology sector. Here is the geographical distribution of the index:
● United States : approximately 68% of the index
● Japan : about 6%
● United Kingdom : approximately 4%
● France : approximately 3%
● Canada : approximately 3%
● Germany : approximately 2.5%
● Australia: approximately 2%
● Other developed countries : about 10%
Thanks to its broad coverage, the MSCI World Index is considered a reference benchmark for those investing in global markets.
Why invest in an MSCI World ETF?
MSCI World ETFs are among the most popular instruments among investors around the world thanks to their ability to replicate global growth with a single investment. They offer diversification, stability and low costs, making them an excellent choice for those who want a solid and long-term oriented portfolio.
Investing in an MSCI World ETF means access to over 1,500 leading companies spread across 23 developed countries. This reduces the specific risk linked to a single country or sector, offering a balanced exposure to sectors such as technology, financials, healthcare, consumer goods, energy and raw materials.
The MSCI World Index has recorded an average annual performance of 9-10% over the last 50 years. This makes it one of the most profitable financial instruments compared to other forms of investment, such as:
● MSCI World Index: 9-10%
● S&P 500: 10-11%
● Government bonds: 2-4%
● Deposit accounts: 1-2%
Even in times of financial crisis, the index has always shown strong resilience, thanks to the presence of innovative and resilient global companies.
Among the reasons why ETFs are becoming increasingly popular is the low management cost compared to actively managed funds. The best MSCI World ETFs have a TER (Total Expense Ratio) that varies between 0.10% and 0.40%, compared to 1-2% per year for actively managed funds. Let's take an example to better understand:
[Investing €10,000 for 20 years, with a low-cost ETF (0.20%) you would spend only €450 in total fees. Otherwise, with an active fund (1.50%), the cost shoots up to €4000.]
How to choose the best MSCI World ETF?
Choosing the best MSCI World ETF can seem complex, but there are some key factors to consider to find the product best suited to your needs.
First, there is the TER (Total Expense Ratio), which represents the annual management cost of the ETF and is expressed as a percentage. Although it may seem like a small figure, a higher TER can affect the long-term performance of your investment.
Choosing an ETF with a lower TER allows you to maximize returns over the long term. Among the best MSCI World ETFs, the TER varies between 0.12% and 0.40%, so it is important to compare the costs before investing.
Another important aspect is the size and liquidity of the ETF. A larger ETF with high liquidity is generally more stable and has tighter spreads. This means that an ETF with many assets under management is more solid and high trading volumes reduce the difference between the purchase and sale price. There is also another factor to highlight. ETFs can replicate the MSCI World in two ways:
● Physical replication: The ETF directly purchases the shares of the index (preferred for transparency and stability).
● Synthetic replication: The ETF uses derivative instruments (swaps) to replicate the index (sometimes more efficient, but with counterparty risk).
For long-term investors, physical replication is generally preferable. Synthetic replication, on the other hand, can be more cost-effective, but introduces counterparty risk.
Finally, it is also important to consider dividend management. MSCI World ETFs can manage dividends in two ways:
● Accumulating ETFs: they automatically reinvest dividends, promoting compound growth.
● Distributing ETFs: they pay dividends to investors periodically (quarterly, half-yearly or annually).
The choice between one or the other approach is quickly said. If the goal is long-term growth, it is better to prefer accumulation ETFs, instruments that guarantee higher returns through automatic reinvestment. If you prefer to obtain a passive income, the choice should be directed to distribution ETFs.
Best MSCI World ETFs in 2025
Investing in an MSCI World ETF means gaining global exposure with a single instrument, but choosing the best ETF can make a difference in terms of costs, performance and investment strategy. Here is a ranking of the best MSCI World ETFs of 2025, analyzing costs (TER), replication method, dividend management and assets under management (AUM) .
iShares Core MSCI World UCITS ETF (IE00B4L5Y983)
The iShares ETF is one of the most widespread and used by investors. With a TER of 0.20% and physical replication, it represents a solid choice for those who want a highly liquid and transparent fund. The physical replication strategy guarantees a direct acquisition of the shares contained in the index, eliminating the counterparty risk present in synthetic ETFs. Furthermore, with assets under management exceeding 50 billion euros, it is one of the largest ETFs on the market, a feature that guarantees reduced spreads and greater efficiency in purchase and sale operations.
This ETF is a dividend-paying ETF, which means that the profits generated by the companies in the portfolio are not automatically redistributed but are paid periodically to investors. For those who adopt a long-term strategy and aim for compound growth, it may be more convenient to opt for an accumulation version.
Xtrackers MSCI World UCITS ETF (LU0274208692)
The Xtrackers ETF stands out for its synthetic replication method, which uses swaps to replicate the index without physically purchasing the underlying securities. This strategy can offer a lower tracking error than physical replication, allowing for a more precise alignment with the performance of the index. However, it introduces a counterparty risk, linked to the financial institutions with which the ETF enters into swaps.
With a TER of 0.19%, it is slightly cheaper than the iShares ETF, but has smaller assets, around 7 billion euros. This ETF is accumulation, so the dividends generated by the shares are automatically reinvested in the fund, increasing the value of the units held over time.
Amundi MSCI World UCITS ETF (LU1681043599)
The Amundi ETF is among the most competitive in terms of costs, with a TER of 0.18%, making it one of the most convenient for those looking for a physical replication of the index. Unlike other ETFs, Amundi offers both an accumulation and distribution version, allowing investors to choose the mode that best suits their needs.
As a low-cost ETF, it is particularly popular with retail investors. However, compared to iShares and Xtrackers, it has fewer assets under management, around €5 billion, which could translate into less liquidity and slightly higher spreads.
Vanguard FTSE All-World UCITS ETF (IE00B3RBWM25)
Unlike the other ETFs in this ranking, Vanguard's fund tracks the FTSE All-World Index, which includes not only developed markets but also emerging markets. This means that, in addition to the United States, Europe and Japan, the portfolio also includes stocks of companies in China, India, Brazil and other developing markets.
The management cost is slightly higher, with a TER of 0.22%, but it offers broader exposure than the MSCI World. The ETF uses physical replication and distributes dividends, so it is more suitable for those seeking periodic returns rather than long-term growth based on automatic reinvestment.
SPDR MSCI World UCITS ETF (IE00BFY0GT14)
Of all the MSCI World ETFs analyzed, SPDR is the most convenient in terms of management costs, with a TER of 0.12%. This feature makes it interesting for investors who want to minimize management costs in the long term.
Unlike the iShares ETF, which has a dividend accumulation policy, the SPDR ETF provides for periodic distributions of profits. For those who want to build a growth-oriented portfolio without having to manually reinvest dividends, it may be less convenient than an accumulating ETF.
One disadvantage of this ETF is its smaller size compared to other more established funds. With assets under management of around €2 billion, it may have higher spreads and lower liquidity than larger alternatives such as iShares and Xtrackers.
How to invest in MSCI World ETFs?
MSCI World ETFs are financial instruments that are easily accessible even for those who have no experience in the world of investments. To purchase them, simply open an account with an online broker and choose the ETF that best suits your needs. However, to invest effectively, it is important to consider not only where to buy ETFs, but also how to manage the investment over time through accumulation and portfolio rebalancing strategies.
To buy an MSCI World ETF you need a reliable financial intermediary. Today there are several online platforms that allow you to invest easily and at low costs.
The choice of broker depends on factors such as trading commissions, the possibility of accessing savings plans, the ease of use of the platform and the range of ETFs available.
Conclusions
MSCI World ETFs represent one of the best solutions for investing in a simple and diversified way in global markets. They offer broad exposure to over 1,500 leading companies in developed countries, ensuring stability and growth over the long term. Thanks to low management costs and the possibility of choosing between physical or synthetic replication, accumulation or distribution of dividends, investors can adapt the choice of fund to their financial needs.
Selecting the most suitable ETF depends on several factors, including TER, liquidity and replication strategy. iShares, Amundi and Xtrackers are among the most reliable providers, while online brokers allow you to invest in these instruments at competitive costs. Which one will you choose for your next investment strategy?
The information provided in this content is for informational purposes only and does not constitute financial, legal or tax advice, nor does it intend to constitute a solicitation for public savings under current legislation. It is recommended to consult a qualified professional before making any investment decisions.
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