MSCI World ex USA: Your Guide to Global Equities Diversification

What is the MSCI World ex USA Index?

The MSCI World ex USA Index is a stock market index that tracks the performance of large- and mid-cap stocks from 23 developed markets outside the United States. It is a globally recognized benchmark for investors seeking exposure to international equity markets.

Key Statistics

• Number of Constituents: 1,661
• Countries Covered: 23
• Market Capitalization: Over $20 trillion
• Average P/E Ratio: 17.5
• Average Dividend Yield: 1.8%

Why Invest in the MSCI World ex USA Index?

Diversification:
Investing in MSCI World ex USA allows investors to diversify their portfolio across a wide range of developed markets, reducing country-specific risks.

Growth Potential:
Developed markets outside the US have historically experienced solid economic growth, driving stock market appreciation.

Currency Exposure:
By investing in non-US stocks, investors gain exposure to other currencies, potentially enhancing returns through currency fluctuations.

Returns:
Over the past 10 years, MSCI World ex USA has delivered an annualized return of 11.8%.

MSCI World ex USA vs. Other International Indices

How to Invest in MSCI World ex USA

Investors can gain exposure to MSCI World ex USA through:

• ETFs: Invesco MSCI World ex USA ETF (ERUS), Vanguard FTSE Developed ex North America ETF (VDE)
• Mutual Funds: T. Rowe Price International Growth Fund (TRIGX), Fidelity International Growth Fund (FIVFX)
• Direct Ownership: Purchasing individual stocks from companies included in the index

Common Mistakes to Avoid

• Overweighting US Equities: Investors should avoid concentrating their portfolio too heavily on US stocks.
• Ignoring Currency Risk: Currency fluctuations can impact returns. Consider hedging your exposure to reduce currency risk.
• Trying to Time the Market: It's impossible to accurately predict market movements. Invest for the long term and avoid chasing short-term gains.

Benefits of Investing in MSCI World ex USA

• Diversification: Reduced volatility and risk.
• Growth Potential: Access to emerging markets with high growth potential.
• Currency Exposure: Enhanced returns through currency appreciation.
• Global Exposure: Exposure to a broad range of international markets.

Conclusion

The MSCI World ex USA Index provides investors with a convenient and effective way to diversify their portfolios and access global equity markets. By investing in this index, investors can potentially enhance their returns, reduce risk, and capture the growth opportunities available outside the United States.

Additional Resources

• MSCI World ex USA Index Fact Sheet
• Investing in the MSCI World ex USA Index
• Top ETFs to Track the MSCI World ex USA Index

Testimonials

"Diversifying my portfolio with the MSCI World ex USA Index has given me peace of mind. I know I'm not overly reliant on any one market." - John, Investor

"The growth potential in international markets is undeniable. I'm glad I have exposure to it through MSCI World ex USA." - Mary, Investor