Key Takeaways
- Global equity index covering developed and emerging markets.
- Market-cap weighted, includes large- and mid-cap stocks.
- Represents about 85% of each market's free float capitalization.
- Over 2,700 stocks across 47 countries for broad diversification.
What is MSCI All Country World Index (ACWI)?
The MSCI All Country World Index (ACWI) is a global equity benchmark that tracks the performance of large- and mid-cap stocks across both developed and emerging markets. It covers approximately 85% of the free float-adjusted market capitalization in each included country, offering broad market exposure. The index combines the MSCI World Index and the MSCI Emerging Markets Index to provide a comprehensive view of global equities.
This index is commonly used by investors seeking diversified, global market exposure, including access to key sectors and regions featured in FAANG stocks.
Key Characteristics
MSCI ACWI’s design incorporates rigorous criteria to ensure representativeness and investability.
- Global Coverage: Includes around 47 countries, split between 23 developed and 24 emerging markets, providing extensive geographic diversification.
- Market Capitalization Weighting: Constituents are weighted by free float-adjusted market cap, reflecting only publicly tradable shares.
- Diversification: Covers approximately 2,700–3,000 stocks across 11 sectors following the Global Industry Classification Standard (GICS).
- Regular Reviews: Quarterly rebalancing adjusts index constituents based on market changes and liquidity.
- U.S. Market Dominance: The United States typically accounts for 60–64% of the index, highlighting its market cap leadership.
How It Works
The MSCI ACWI tracks stocks that meet size and liquidity thresholds to represent investable opportunities worldwide. By combining developed and emerging markets, it offers exposure to mature economies alongside higher-growth regions.
Investors can access this broad market coverage through index funds and ETFs such as IVV and IXUS, which replicate the index’s performance. The index’s methodology ensures that sector and country weights reflect global economic trends, enabling dynamic portfolio construction and potential for tactical asset allocation decisions.
Examples and Use Cases
MSCI ACWI is widely used for global equity benchmarking and portfolio diversification.
- Technology Leaders: Companies like Apple and Microsoft represent the U.S. tech sector’s significant weight within the index.
- Emerging Market Exposure: Stocks such as Alibaba and Taiwan Semiconductor provide access to high-growth regions.
- Sector Allocation: Investors can leverage the index to gain balanced exposure across sectors, complementing factor investing strategies.
- Global ETFs: Funds tracking MSCI ACWI are featured in lists of the best ETFs and best low-cost index funds, making it accessible for cost-conscious investors.
Important Considerations
While MSCI ACWI offers comprehensive global exposure, investors should be aware of the index’s U.S. concentration risk, as well as the modest, yet growing, weight of emerging markets. Understanding macroeconomic factors can help in interpreting index performance and managing portfolio risk.
Using the MSCI ACWI as a core holding may require complementing it with tactical asset allocation adjustments to align with your specific investment goals and risk tolerance.
Final Words
The MSCI All Country World Index offers broad, diversified exposure to global equities across developed and emerging markets, with a heavy weighting in U.S. stocks. To align your portfolio with global trends, review how your current investments compare to ACWI’s sector and country allocations.
Frequently Asked Questions
The MSCI All Country World Index (ACWI) is a global equity index that tracks large- and mid-cap stocks across both developed and emerging markets. It covers approximately 85% of the free float-adjusted market capitalization in each included country, offering a comprehensive benchmark for global stock performance.
The MSCI ACWI includes 23 developed markets such as the United States, Japan, and the United Kingdom, along with 24 emerging markets including China, India, and Brazil. In total, it covers around 47 to 49 countries worldwide, providing broad geographic diversification.
The index is weighted by free float-adjusted market capitalization, meaning it focuses on publicly tradable shares and excludes restricted holdings. It includes companies based on size, liquidity, and sector representation, capturing about 85–100% of the global market cap.
The MSCI ACWI includes large- and mid-cap companies across 11 sectors, such as technology, finance, and consumer goods. Examples include Apple and Microsoft from the U.S., Taiwan Semiconductor, Samsung Electronics, Alibaba, and Reliance Industries, ensuring sector and regional diversification.
MSCI conducts quarterly reviews of the ACWI to adjust its constituents based on market conditions, company valuations, and geopolitical changes. This ensures the index remains an accurate and investable representation of the global equity market.
Unlike the MSCI World Index, which covers only developed markets, the MSCI ACWI includes both developed and emerging markets. This broader inclusion offers investors exposure to high-growth emerging economies in addition to established developed markets.
As of late 2025, the United States represents about 60–64% of the index due to its large market capitalization. Other significant country weights include Japan (4–5%), the United Kingdom (3%), Canada (3%), China (3%), and various European and Asian countries each contributing around 2–3%.
