The MSCI All Country World Index (ACWI)

What Is the MSCI All Country World Index?

The MSCI All Country World Index (ACWI) is a stock index intended to follow broad global equity-market performance. Kept up with by Morgan Stanley Capital International (MSCI), the index includes the stocks of almost 3,000 companies from 23 developed countries and 25 emerging markets.

Fund managers utilize the MSCI ACWI as an aide for asset allocation and a benchmark for the performance of global equity funds. The index is additionally utilized as the basis for making investment products, for example, exchange-traded funds (ETFs).

Grasping the MSCI All Country World Index

Investors can expand their portfolio holdings in a number of ways. A portfolio manager or investor can purchase a scope of individual stocks that have a low or negative correlation with one another.

Then again, a not so much costly but rather more efficient method for investing may be to claim ETFs that duplicate the performance of an index, for example, the Dow Jones Industrial Average (DJIA) or the S&P 500 index. For investors that likewise need to have exposure to global stocks, the MSCI ACWI index can be a decent option.

Institutional investors, including the people who oversee mutual funds and pension funds, can involve the MSCI ACWI as a benchmark to measure the performance of their portfolios and a manual for geographical diversification. Individual investors can likewise involve the ACWI as a benchmark to compare which funds have the best risk-adjusted returns.

MSCI ACWI Index versus iShares ACWI ETF

Commonly, investors can't buy an index straightforwardly, like the MSCI ACWI, since it's intended to address a measurement of performance and qualities of different sectors, countries, and equity holdings.

All things considered, investors can buy an ETF that tracks or mirrors the sythesis and performance of the index. Below is a comparison between the MSCI ACWI index and Blackrock's iShares MSCI ACWI ETF, including a portion of the top country, sector, and portfolio holdings.

MSCI ACWI Index Country and Sector Weightings

The countries addressing the highest total market cap for the MSCI ACWI index are the U.S. (61.31%), Japan (5.54%), China (3.62%), the United Kingdom (3.6%), and Canada (2.9%). Below are the weightings for every sector as of Dec. 31, 2021.

• Data Technology: 23.58%
• Financials: 13.86%
• Consumer Discretionary: 12.4%
• Medical care: 11.69%
• Industrials: 9.64%
• Communication Services: 8.58%
• Consumer Staples: 6.8%
• Materials: 4.67%
• Energy: 3.4%
• Utilities: 2.7%
• Real Estate: 2.7%

MSCI ACWI Index Top Holdings

Below are the main ten holdings by their portfolio weighting inside the index as of Dec. 31, 2021:

• Apple Inc: 4.18%

• Microsoft Corp: 3.42%

• Amazon.com: 2.16%

• Tesla: 1.27%

• Alphabet A: 1.24%

• Alphabet C: 1.19%

• Meta Platforms A: 1.14%

• Nvidia: 1.05%

• Taiwan Semiconductor Mfg: 0.78%

• Unitedhealth Group: 0.67%

The main ten holdings address 17.10% of the weighting for the index.

iShares MSCI ACWI ETF

One of the ETFs that track and invest in the MSCI ACWI index is Blackrock's iShares MSCI ACWI ETF, which has almost $17.5 billion in assets under management (AUM) as of Jan. 25, 2022.

The ETF possesses the stocks of 2,332 holdings from the index and has an expense ratio of 0.33% as of Jan. 25, 2022. The expense ratio addresses the cost to investors for Blackrock to deal with the fund.

The iShares ETF has similar sector and top ten holdings with almost similar portfolio weightings as the MSCI ACWI index as of Jan. 25, 2022. Below is the fund's performance versus the MSCI ACWI index as of Dec. 31, 2021.

An investor seeking to diversify their portfolio geographically could invest a portion of their funds in an ETF that tracks the MSCI ACWI All Cap Index, which has in excess of 15,000 equity holdings from 23 developed markets and 25 emerging markets. This would give exposure to a large number of global stocks yet incorporate a lot more small and mid-cap stocks.

It's important to note that investors ought to know that an index containing foreign equities could likewise contain U.S. stocks. Thus, investors ought to monitor whether they'd be overexposed to U.S. equities on the off chance that they have previously allocated a critical portion of their portfolio to U.S. stocks. If it's not too much trouble, counsel a qualified financial advisor to determine the best asset allocation strategy for your investment needs and long-term financial objectives.

Features

• The MSCI ACWI index is utilized as a benchmark for global equity funds and as a manual for asset allocation.
• The MSCI ACWI is a stock index that tracks almost 3,000 stocks in 48 developed and emerging market countries.
• The parts of the MSCI ACWI index have a combined market capitalization of more than $70 trillion.
• Individual investors can gain access to the index through ETFs that reproduce its performance.