FTSE All‑World Index

FTSE All-World, a global equity benchmark, covers large- and mid-cap stocks from both developed and emerging markets—thereby offering investors a single, free-float-weighted gauge of roughly 95 % of the investible world market capitalisation. Consequently, the FTSE All-World serves as the default yard-stick for anyone seeking broad, country-agnostic equity exposure.


FTSE All-World

1. Quick Snapshot (May 2025)

MetricValueTransition Note
Constituents~4 100 companiesTo begin with, depth spans every major market.
Countries49 (23 DM, 26 EM)Meanwhile, geographic reach remains unmatched.
Total Market CapUS $68 trillionThus, scale dwarfs regional indices.
Developed / Emerging Split89 % / 11 %Accordingly, EM weight still matters.
Dividend Yield1.9 %Therefore, income complements growth.
Launch Year1994Finally, a 30-year history aids back-tests.
CurrencyUSD (local and other FX series available)Hence, performance can be viewed in multiple bases.

2. Inclusion Rules

RuleDetailTransition Note
Size Cut-offTop 90–95 % of each country’s free-float market capFirst and foremost, only liquid names enter.
Liquidity ScreenMinimum median turnover; free-float share > 5 %Consequently, investibility is preserved.
Free-Float AdjustmentInside ownership excluded; caps for strategic stakesMoreover, control blocks don’t distort weight.
WeightingPure free-float market cap, no regional capsThus, larger economies naturally dominate.
Review ScheduleQuarterly (Mar, Jun, Sep, Dec)Ultimately, the FTSE All-World stays current.

3. Regional & Sector Weights

RegionWeight*Sector LeadersTransition Note
United States61 %Tech, Health CareChiefly, mega-caps set the tone.
Europe ex-UK14 %Industrials, FinancialsMeanwhile, cyclicals provide ballast.
Asia-Pacific ex-Japan9 %Consumer, TechAdditionally, demographic growth fuels demand.
Japan6 %Industrials, ITLikewise, restructuring boosts ROE.
Emerging Markets10 %Banks, InternetHence, catch-up growth remains a lever.

*April 2025, with the largest single-stock weight capped near 5 %.

Because U.S. names dominate, the FTSE All-World reflects dollar-centric leadership; nevertheless, sizeable pockets of diversification persist.


4. Recent Performance (USD)

YearTotal ReturnKey DriversTransition Note
2022–17.6 %Global rate shockInitially, tightening weighed heavily.
2023+21.1 %Tech rebound, China reopeningSubsequently, risk appetite revived.
2024+12.3 %AI hardware boom, EM recoveryMoreover, secular themes kicked in.
YTD 2025+5.9 %Stable rates, U.S. earnings beatsSo far, macro stability supports gains.

Five-year annualised return sits at 8.7 %, while volatility averages 15 %therefore, risk-adjusted metrics remain attractive.


5. Why Investors Use the FTSE All-World

  • Comprehensive Global Beta. One ticker captures ~95 % of investible market cap; consequently, allocation headaches fade.
  • Benchmarking. Active global-equity funds measure alpha versus this neutral yard-stick; thus, performance claims stay transparent.
  • ETF Underpinning. Low-cost trackers (e.g., VWRA, VWRL) replicate the FTSE All-World, thereby delivering instant diversification.
  • Asset-Allocation Models. CIOs plug index returns into capital-market assumptions; as a result, strategic mix decisions hinge on its history.

6. Strengths & Caveats

StrengthsCaveats
Broadest practical coverage of global equities.However, the U.S. dominates (> 60 %), reducing regional balance.
Quarterly reviews keep the basket current.Excludes small caps, therefore omits ~5 % of global float.
Free-float adjustment improves investibility.EM liquidity screens limit frontier exposure.

7. Emerging Trends to Watch

  • ESG Tilt. FTSE now offers All-World Climate and All-World ex-Fossil Fuel offshoots; hence, sustainability goals become investible.
  • Small-Cap Inclusion Debate. Asset owners lobby for FTSE All-World + Small-Cap to reach 99 % coverage, potentially broadening opportunity sets.
  • China A-Share Weighting. Further inclusion phases could lift EM share toward 15 %, thereby diluting U.S. weight.
  • Tokenised Delivery. Pilot on-chain versions aim to cut settlement latency for global-equity baskets; ultimately, trading hours may extend.

Key Takeaways

The FTSE All-World condenses large- and mid-cap equities from 49 countries into one investible benchmark. As of May 2025, it houses ~4 100 stocks, sports a 61 % U.S. weight, yields 1.9 %, and posts a five-year annualised return near 9 %. Ultimately, the FTSE All-World remains the go-to yard-stick for global-equity portfolios, multi-asset models, and passive ETFs—though investors should stay cognisant of its U.S. tilt and absence of small caps.

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