MSCI World ETFs and index funds compared: TER, tracking and which to choose

1. What the MSCI World really holds

The MSCI World holds 1,280 companies from 23 developed countries. It excludes emerging markets (China, India, Taiwan, Brazil…) and small companies. The part people underestimate: 72.1% of it is US companies, and the ten largest positions are 26.6% of the index (MSCI, 31 Aug 2026).

If you want emerging markets too, look at the MSCI ACWI or the FTSE All-World; if you want only the US, the S&P 500.

Index provider factsheets (MSCI, FTSE Russell, S&P via Vanguard, Nasdaq), data as of 31 Aug 2026 for the world indices and 30 Jun 2026 for the S&P 500 and Nasdaq-100. Weights move every day.

2. MSCI World ETFs compared

All of these are Irish-domiciled UCITS ETFs you can buy from a European broker. The iShares one is by far the largest; it is not the cheapest.

Data checked on 28 Sept 2026 against each issuer's product page and justETF. TER is the ongoing charge; it does not include broker commissions, spreads or custody fees. Links go to our page for that product where one exists.

3. TER versus what you actually got

The TER tells you what a fund charges; the tracking difference tells you what you ended up with. Here is how each ETF did against the MSCI World in each of the last three full years:

Fund return minus index return, in percentage points, per calendar year; positive means the fund did better than its index. Source: trackingdifferences.com, rounded to 0.1. Past tracking does not guarantee future tracking.

The lesson: iShares charges 0.20% and Xtrackers 0.12%, yet both tracked the index almost identically in 2023–2025. Securities lending income and dividend tax handling close most of the TER gap. Invesco earned its figures at its old 0.19% TER; it has charged 0.05% since April 2026.

4. MSCI World index funds (non-ETF)

In Spain these are the ones that allow tax-free switching between funds. They are sold through fund platforms and robo-advisors; the share class available can differ by platform, so check the ISIN you are actually offered.

Ongoing charges from each issuer (KID or product page). iShares lists a high minimum for its D class that Spanish platforms usually waive. Fidelity MSCI World Index Fund is left out until checked against its KID.

5. How to choose between them

• Investing from Spain with regular contributions and possible future switches: an index fund, for the tax-free switch.
• Using a broker: any of the large ETFs above. Between them, differences of a few hundredths of TER matter less than the broker commission you pay each time you buy.
• Prefer not to hold swaps: choose a physical one; the synthetic Invesco has tracked well, but the mechanism is harder to explain to yourself in a crisis.
• Want dividends paid out: HSBC (distributing) or the distributing classes of the others.

This is educational content, not financial advice: it explains how these products work so you can make your own decisions, and it does not recommend buying or selling any of them.