In short: The MSCI World tracks large and mid-cap companies across 23 developed countries. The FTSE All-World covers large and mid-cap stocks across developed and emerging markets in over 45 countries. The S&P 500 tracks 500 large US companies. The MSCI World and FTSE All-World cover large and mid-size companies only.
How do these three indices differ?
When selecting an equity ETF, investors frequently encounter three major benchmarks: the MSCI World, the FTSE All-World, and the S&P 500. While all three are market-capitalisation-weighted equity indices, they represent fundamentally different universes of the stock market. Understanding their coverage, regional composition, and constituent selection rules helps clarify what an investment fund tracking each benchmark actually holds.
The core distinction lies in geographic reach and company size. The MSCI World represents large and mid-cap equities across developed economies only. The FTSE All-World broadens this by including both developed and emerging markets. The S&P 500 focuses on 500 large companies in a single country, the United States. This article compares the indices using factsheets published by MSCI and FTSE Russell and documents from fund issuers.
Geographic coverage and emerging markets
A frequent point of confusion among beginners is the meaning of “World” in index terminology. In financial benchmarks, the word does not automatically indicate every country on the planet:
- MSCI World (Developed markets only): The MSCI World covers large and mid-cap representation across 23 developed-market countries, such as the United States, Japan, the United Kingdom, France, Germany, the Netherlands, and Canada. It contains a 0% allocation to emerging markets. Fast-growing developing economies like China, India, Brazil, and Taiwan are entirely absent from this index.
- FTSE All-World (Developed and emerging markets): The FTSE All-World encompasses large and mid-cap stocks across developed and emerging economies in more than 45 countries. Under the FTSE Global Equity Index Series framework, it includes both Advanced Emerging and Secondary Emerging markets alongside developed nations, providing broad exposure in a single benchmark.
- S&P 500 (United States): The S&P 500 tracks 500 large US companies. Vanguard describes its S&P 500 fund as holding large-sized company stocks in the US.
The MSCI World and FTSE All-World are market-capitalisation weighted, so the United States is the largest share of both. In the MSCI World the United States is about 73% (72.94% on 30 September 2026). In the FTSE All-World it is about 62% (62.28% on 30 September 2026).
Market capitalisation and small caps
Another key structural attribute is the market-capitalisation segment covered:
The MSCI World index covers approximately 85% of the free-float-adjusted market capitalisation in each covered country, capturing large-cap and mid-cap stocks. It does not include dedicated small caps.
The FTSE All-World index also covers large-cap and mid-cap stocks, capturing approximately 90% to 95% of the investable market value in covered developed and emerging markets. It does not include small caps. FTSE Russell’s broader All Cap coverage is on our FTSE Global All Cap page.
The MSCI World and FTSE All-World cover large and mid-size companies only. A fund tracking either holds no dedicated small-cap companies.
Constituent counts and holdings concentration
The breadth of diversification differs significantly across the three benchmarks:
- MSCI World constituent count: On 30 September 2026, the index factsheet reported 1,249 constituents. The ten largest companies accounted for 27.85% of total index value.
- FTSE All-World constituent count: At 30 September 2026, the FTSE Russell factsheet reported 4,204 constituents. The ten largest companies weighed 24.81% of the index.
- S&P 500 constituent count: The S&P 500 has 500 companies. Vanguard’s S&P 500 fund page shows 503 stocks in its benchmark at 30 September 2026, and its holdings list shows some companies, such as Alphabet, on more than one line. In the Vanguard S&P 500 ETF the top 10 holdings made up about 39% of the fund (38.98% at 30 September 2026).
An index count and a fund’s holdings can differ. At 30 September 2026 the Vanguard FTSE All-World UCITS ETF held 3,821 stocks (benchmark: 4,203) and the Vanguard S&P 500 UCITS ETF held 504 (benchmark: 503). The iShares Core MSCI World factsheet showed 1,250 holdings at 5 October 2026. The Vanguard FTSE All-World KID says the fund invests through physical acquisition in a representative sample of index securities.
Methodology and constituent selection rules
How a company enters or leaves an index depends on the provider’s governing rulebook:
MSCI World: Managed under the MSCI Global Investable Market Indexes methodology (May 2026), which also refers to an MSCI Equity Index Committee. Reviews occur quarterly in February, May, August, and November.
FTSE All-World: Managed under the FTSE Global Equity Index Series Ground Rules (September 2026), which FTSE publishes. Changes are implemented quarterly after market close on the third Friday of March, June, September, and December, with larger semi-annual universe reviews taking place in March and September.
S&P 500: S&P publishes its own rules in the S&P U.S. Indices Methodology. We do not summarise them here.
Index comparison at a glance
The table below summarises key properties of the three benchmarks, based on MSCI and FTSE Russell factsheets and fund issuer documents:
| Feature | MSCI World (as at 30 September 2026) | FTSE All-World (as at 30 September 2026) | S&P 500 (as at 30 September 2026) |
|---|---|---|---|
| Index provider | MSCI Inc. | FTSE Russell (LSEG) | S&P Dow Jones Indices |
| Geographic coverage | 23 developed-market countries | Developed and emerging markets (>45 countries) | United States |
| Emerging markets | Excluded (0%) | Included (large and mid-cap) | Not included (US companies) |
| Company size segments | Large-cap and mid-cap | Large-cap and mid-cap | Large US companies |
| Small caps included | No | No | Not covered here |
| Market-cap coverage | ~85% of developed country free float | ~90%–95% of investable market float | Not covered here |
| Constituent count | 1,249 | 4,204 | 503 stocks in Vanguard’s benchmark (500 companies) |
| Top 10 concentration | 27.85% | 24.81% | ~39% (Vanguard S&P 500 ETF holdings) |
| Weighting methodology | Free-float-adjusted market capitalisation | Market-capitalisation weighted | Not covered here |
| Review schedule | Quarterly (Feb, May, Aug, Nov) | Quarterly (Mar, Jun, Sep, Dec) | Not covered here |
| Common UCITS ETF example | iShares Core MSCI World (IWDA) | Vanguard FTSE All-World (VWCE) | Vanguard S&P 500 (VUAA) |
| ETF ongoing costs (TER) | 0.20% | 0.14% | 0.07% |
What this comparison does not tell you
While an index comparison provides structural clarity, it is essential to understand what theoretical index specifications leave out:
- Index theory vs ETF real-world returns: An index is a theoretical calculation that pays no management fees, experiences no cash drag, pays no exchange transaction fees, and suffers no tracking difference. When you invest in a real ETF, you pay annual ongoing costs (TER: ranging from 0.07% to 0.20% across these categories), broker custody or order fees, and bid-ask spreads.
- Historical returns are not future results: Different historical returns between the US-focused S&P 500 and globally diversified indices reflect past macroeconomic cycles, currency swings, and technology sector performance. Past performance does not guarantee future results, and investment capital is always at risk.
- Currency fluctuation for European investors: The MSCI World and FTSE All-World factsheets show USD figures. A European investor buying an unhedged UCITS ETF in euros is exposed to currency risk between the euro and the US dollar. If the dollar strengthens against the euro, euro returns increase; if the dollar depreciates, euro returns decline.
- Substantial portfolio overlap: The United States is about 62% of the FTSE All-World and about 73% of the MSCI World, so an S&P 500 ETF and a global ETF overlap heavily. Holding both adds few new companies.
- Dividend withholding tax: Withholding tax on dividends can reduce what a fund keeps. See our dividend leakage article.
- No single best index: The three indices cover different parts of the market. Stazora provides educational analysis and never personal investment recommendations.
Fund-level comparisons: VWCE vs IWDA and CSPX vs VUAA.
European UCITS ETFs tracking each benchmark
European retail investors access these indices through UCITS ETFs. Detailed fund breakdowns and share classes are available on our dedicated index and ETF pages:
- Tracking the MSCI World: The iShares Core MSCI World UCITS ETF accumulating class (IWDA, ISIN IE00B4L5Y983) has ongoing charges of 0.20% per year, according to the iShares factsheet (5 October 2026).
- Tracking the FTSE All-World: The Vanguard FTSE All-World UCITS ETF is available in an accumulating class (VWCE, ISIN IE00BK5BQT80) and a distributing class (VWRL, ISIN IE00B3RBWM25), both featuring ongoing charges of 0.14% per year effective from 28 July 2026.
- Tracking the S&P 500: The Vanguard S&P 500 UCITS ETF is available in an accumulating class (VUAA, ISIN IE00BFMXXD54) and a distributing class (VUSA, ISIN IE00B3XXRP09), both with ongoing charges of 0.07% per year according to their KIDs dated 29 September 2026.
Investing involves risk of loss. The figures presented on this page are for illustrative and educational purposes only and do not constitute financial advice. Past performance does not guarantee future results.
Frequently asked questions
What is the primary difference between MSCI World and FTSE All-World?
The primary difference is the treatment of emerging markets. The MSCI World includes only 23 developed-market nations and contains a 0% allocation to emerging markets. The FTSE All-World includes both developed and emerging markets across more than 45 countries, allocating roughly 10% of its portfolio to emerging economies such as China, India, Taiwan, and Brazil.
Why does the S&P 500 contain 503 stocks instead of 500?
Vanguard’s S&P 500 fund page shows 503 stocks in the benchmark at 30 September 2026, and its holdings list shows some companies, such as Alphabet, on more than one line. We do not state the index provider’s own count here.
Do any of these three indices include small caps?
No for the MSCI World and FTSE All-World: both cover large and mid-size companies only. The S&P 500 is a benchmark of large US companies.
Does holding both the S&P 500 and MSCI World provide better diversification?
Not necessarily. Because US companies make up about 73% of the MSCI World (72.94% on 30 September 2026), holding both an S&P 500 ETF and an MSCI World ETF results in substantial overlap. You increase your weight in the same large US companies.
Related pages and terms
- Getting started: learn the core principles of long-term index investing
- What does an ETF cost?: detailed breakdown of ongoing charges, spreads, and tracking differences
- How to read a factsheet: practical guide to interpreting monthly fund factsheets
- ETF overview: browse our full directory of European UCITS ETFs
- Glossary: Index: reference definition of a market benchmark
- Glossary: Diversification: understanding how risk spreads across sectors and countries
- Glossary: Emerging markets: classification and role in global portfolios
- Glossary: Small caps: definitions and distinct properties of small-cap equities
Sources
- MSCI Inc.: MSCI World Index Factsheet (30 September 2026) and MSCI Global Investable Market Indexes Methodology (May 2026).
- FTSE Russell (LSEG): FTSE All-World Index Factsheet (30 September 2026) and FTSE Global Equity Index Series Ground Rules (September 2026).
- Vanguard Group (Ireland) plc: Product pages, factsheets, and Shareholder Notice (21 July 2026) for Vanguard FTSE All-World UCITS ETF and Vanguard S&P 500 UCITS ETF.
- iShares: Core MSCI World UCITS ETF factsheet (data as at 5 October 2026).
Facts checked on 20 October 2026.