MSCI ACWI vs MSCI World: which should you choose?

MSCI ACWI vs MSCI World

MSCI ACWI

The MSCI ACWI (All Country World Index) is one of the most comprehensive global indices available to investors. It includes both developed and emerging markets, tracking around 2,900 large and mid-sized companies across 47 countries. Its goal is simple: to represent the entire investable global stock market.

Alongside major developed economies like the United States, Japan, and Europe, ACWI also includes emerging markets such as China, India, Brazil, South Africa, Taiwan, and Mexico. This means companies like Alibaba, Taiwan Semiconductor (TSMC), Samsung Electronics, and Reliance Industries sit next to familiar names like Apple and Microsoft.

Because ACWI covers nearly 100% of global market capitalisation, investors gain extremely broad diversification:

• more countries
• more currencies
• more sectors
• exposure to fast-growing emerging economies

The trade-off is that emerging markets tend to be more volatile. This can lead to slightly sharper swings in performance compared to developed-market-only indices. However, in practice, ACWI’s long-term returns have been very similar to MSCI World because emerging markets still make up only around 10–12% of the index.

For anyone wanting a simple, one-ETF solution that captures the whole world, MSCI ACWI is one of the best choices available.

MSCI World

The MSCI World index focuses exclusively on developed markets, covering around 1,500 large and mid-sized companies from 23 countries. These include the United States, the United Kingdom, Germany, France, Japan, Canada, and Australia. Even without emerging markets, the index provides wide exposure to the industrialised world’s biggest economies.

Investing in an MSCI World index fund means buying tiny pieces of globally recognised companies such as Apple, Nestlé, Toyota, Novartis, and Unilever. The index spans many sectors and regions, giving you diversification without the need to pick stocks or bet on specific countries.

MSCI World is often used as the backbone of long-term portfolios due to its simplicity and strong track record. Since 1992, it has delivered an average return of around 8.5% per year, demonstrating how broad, passive exposure to global equities can help grow your wealth over time. While performance varies year to year, the index has historically been a stable and reliable foundation for global investing.

Historical performance: what the past tells us

Over the past decade in euros, the MSCI ACWI and MSCI World indices have shown nearly identical volatility but ACWI has achieved a slightly higher return thanks to its extra exposure to emerging markets and broader global coverage:

Why choose MSCI ACWI?

Exposure to almost the entire world

MSCI ACWI gives you exposure to nearly the whole investable stock market. You invest in about 2,900 companies across 47 countries. This includes the United States, Europe and Japan, but also emerging countries like India, Brazil and South Africa.

So you’re not just investing in the most developed economies. You also capture the growth of regions that are still developing. If you believe that countries like India or Indonesia will play a bigger role in the future, ACWI already includes them.

A built-in mix of currencies and economies

Because ACWI spans so many countries, your portfolio is not tied to a single currency or region. When one part of the world slows down, another may pick up. Emerging markets also behave differently from developed ones. Sometimes they outperform, sometimes they lag. With ACWI, you don’t have to guess.

A “world in one ETF” setup

A big advantage of ACWI is simplicity. Instead of combining MSCI World with a separate emerging markets fund, you hold just one ETF. You don’t need to rebalance between regions or adjust your weights. Everything is already inside the index.

The downsides of ACWI

The convenience does come with trade-offs.

• Higher fees (TER). ACWI ETFs tend to be more expensive than MSCI World. Tracking more countries and markets is more complex, and that shows up in the cost.
• More volatility. Emerging markets bring extra swings. Their currencies can move sharply, and political events can hit markets quickly.
• Similar long-term performance to MSCI World. Over the past decade, emerging markets haven’t given the extra boost many expected. As a result, ACWI has performed almost the same as MSCI World, sometimes slightly worse.
• Still heavily dominated by the U.S. Even with emerging markets included, around 60 percent of ACWI is made up of American companies. So you’re not fully escaping U.S. concentration.

Why choose MSCI World?

Diversification across developed markets

MSCI World holds about 1,500 companies across 23 developed countries. You invest in the strongest economies, like the U.S., Europe, Japan, Canada and Australia. It’s global, but with less volatility than emerging markets. If the U.S. slows down, strong performance from Europe or Japan can help cushion the drop. Many long-term investors like this balance.

Exposure to multiple currencies

With MSCI World, your portfolio is not tied to the U.S. alone. You get exposure to the euro, the yen and other developed-market currencies. If leadership shifts away from the U.S., your portfolio adjusts automatically.

Straightforward and predictable

MSCI World is easier to understand. Many European investors use it as the core of their portfolio because the costs are low and the index is widely used. Irish-domiciled accumulating World ETFs are especially efficient for Europeans, including Belgians.

The downsides of MSCI World

It’s not perfect.

• High U.S. concentration. About 65 to 70 percent of the index is American companies like Apple and Microsoft.
• No emerging markets. If China, India or other fast-growing countries outperform in the future, you won’t benefit unless you add them separately.
• Recent underperformance versus the S&P 500. Over the last decade, U.S. tech giants lifted the S&P 500 far above MSCI World. That could reverse, but it’s something people look at.

What else should you consider when investing?

At Curvo, we always look beyond the index itself. Comparing MSCI ACWI and MSCI World is useful, but it’s only one piece of the puzzle. Your personal situation, your goals, and a few practical details often have a bigger impact on your long-term results than whether you pick ACWI or World. Below are the key things we think about when building a portfolio.

Tax efficiency

Taxes matter, especially if you’re investing from Belgium. One of the biggest decisions is choosing between accumulating and distributing ETFs.

• Accumulating ETFs reinvest dividends automatically. You avoid dividend taxes and let your money compound quietly in the background.
• Distributing ETFs pay out cash, which means you’re taxed every time a dividend is received.

Two ETFs can track the same index but behave very differently simply because of how they handle dividends. So it’s worth double-checking this before investing.

Currency exposure

Both MSCI World and MSCI ACWI are dominated by American companies. That means a big part of your portfolio moves with the U.S. dollar.

If the euro strengthens, your dollar investments lose value in euros. If the euro weakens, you get a nice tailwind. This isn’t something to fear. It’s just part of global investing. But it helps to understand that currency swings can affect your returns in the short term even when the underlying companies haven’t changed.

Domicile of the fund

The domicile of an ETF affects taxes more than most investors expect. Irish-domiciled funds (identified by IE) tend to be the most tax-efficient for Europeans because Ireland has favourable treaties with the U.S. This reduces withholding taxes on dividends from American companies.

If you’re Belgian, the transaction tax (TOB) also depends on the ETF’s structure. It ranges from 0.12% to 1.32%. If you plan to invest monthly, picking the wrong ETF can quietly eat into your returns.

Ease of monthly investing

Consistent investing is much more important than perfect timing. But some brokers make monthly investing harder than it needs to be. They add friction through fees, conversions, or clunky interfaces. When we invested through brokers ourselves, we noticed that the fun of placing trades wears off quickly. After a few months, it becomes yet another task on your to-do list.

That’s one of the reasons we built Curvo. You set your monthly plan once. Every month, your contribution is invested automatically into your portfolio. No transaction fees. No calculations. No “I’ll do it later”.

It helps you build a habit, which is half the battle.

Place in your portfolio

Your choice between MSCI World and MSCI ACWI also depends on what you already hold.

Ask yourself:

• Do you already have emerging markets in your portfolio? If yes, ACWI may overweight them. If no, ACWI can fill that gap.
• Are you comfortable with the large share of U.S. companies?
• Do you want the simplest setup possible, or do you prefer building your own mix?

Here’s a simple guide:

• You want a single ETF that covers the world → MSCI ACWI.
• You want lower fees and lower volatility → MSCI World.
• You already own an emerging markets fund → MSCI World avoids double exposure.
• You don’t want to rebalance multiple funds → ACWI keeps everything in one place.
• You believe emerging markets will grow strongly → ACWI positions you for that.
• You want the cheapest and most common global index → MSCI World.

Both indices are solid. The “best” one depends on your goals and your tolerance for ups and downs.

Curvo: the easy way to invest without getting lost in the details

If comparing MSCI ACWI vs MSCI World feels like a lot, you’re not alone. When we first tried to build our own portfolios, we spent hours researching ETFs, choosing brokers, understanding taxes and figuring out when to rebalance. It became clear why many people want to invest but never take the first step.

Curvo was built to remove all that complexity. You answer a short questionnaire about your goals and how you feel about risk. Based on your answers, you’re matched with a globally diversified portfolio built by experts. Each portfolio invests in thousands of companies across developed and emerging markets. So you don’t need to debate whether ACWI or World is “better”. You already get global coverage.

Monthly investing is automated. There are no transaction fees. Fractional shares ensure every euro is invested. Rebalancing and tax optimisation happen behind the scenes. It’s passive investing, but without the manual work.

If you want the benefits of global diversification, consistent habits, and a portfolio that fits you, Curvo takes care of the details so you can focus on the long term.

Final thoughts

Both MSCI ACWI and MSCI World give you solid global exposure. ACWI covers more ground with emerging markets included, while World sticks to developed economies with lower fees and less volatility. Historically, they've performed similarly. Your choice depends on whether you value the simplicity of one fund covering everything or prefer the lower costs and stability of developed markets only.

What matters more than picking the "perfect" index is starting. Set up a monthly plan. Keep your costs low. Stay invested through the ups and downs. That consistency will have a bigger impact on your wealth than debating whether 10% emerging market exposure is right for you. If you want to skip the setup work and focus on building the habit, that's exactly what we built Curvo for.