MSCI World Index Annual Returns History
Direct answer: The MSCI World Index tracks large and mid-cap stocks across 23 developed market countries, including the U.S. (approximately 65-70% weight), Europe, Japan, Canada, and Australia. It covers approximately 85% of developed-market equity capitalization. Annual returns since 1970 average approximately 9-10% in USD terms, with major drawdowns in 1974 (−22%), 2002 (−21%), 2008 (−41%), and 2022 (−18%).
MSCI World Index Annual Returns, 1990-2024
| Year | Total Return (USD) |
|---|---|
| 1990 | -17.0% |
| 1991 | +18.3% |
| 1992 | -5.2% |
| 1993 | +22.5% |
| 1994 | +5.1% |
| 1995 | +20.7% |
| 1996 | +13.5% |
| 1997 | +15.8% |
| 1998 | +24.3% |
| 1999 | +24.9% |
| 2000 | -13.2% |
| 2001 | -16.5% |
| 2002 | -19.9% |
| 2003 | +33.1% |
| 2004 | +14.7% |
| 2005 | +9.5% |
| 2006 | +20.1% |
| 2007 | +9.0% |
| 2008 | -40.7% |
| 2009 | +29.9% |
| 2010 | +11.8% |
| 2011 | -5.5% |
| 2012 | +15.8% |
| 2013 | +26.7% |
| 2014 | +4.9% |
| 2015 | -0.9% |
| 2016 | +7.5% |
| 2017 | +22.4% |
| 2018 | -8.7% |
| 2019 | +27.7% |
| 2020 | +15.9% |
| 2021 | +21.8% |
| 2022 | -18.1% |
| 2023 | +23.8% |
| 2024 est. | +18% |
Source: MSCI: World Index. Last verified: September 2026.
Frequently asked questions
Why does the MSCI World underperform the S&P 500 in recent years?
The MSCI World has underperformed the S&P 500 since approximately 2010, primarily because of U.S. large-cap technology dominance. Non-U.S. developed markets (Europe, Japan) have more exposure to slower-growth sectors (banking, industrials, energy) and less to technology. Currency effects also matter: when the U.S. dollar strengthens, non-U.S. returns are diminished in USD terms. European markets have faced structural challenges (demographic decline, energy dependence, banking sector weakness). Japanese stocks had a lost decade (1990s–2000s) that dragged historical averages. The U.S. approximately 65-70% weight means MSCI World and S&P 500 move together significantly, but the non-U.S. component has consistently lagged.
Why would a U.S. investor hold MSCI World instead of just S&P 500?
U.S. investors hold international developed markets for: (1) diversification -- different business cycles, currency exposures, and sector compositions reduce portfolio volatility when correlations are less than 1; (2) valuation -- non-U.S. developed markets periodically trade at significant valuation discounts (lower P/E ratios) vs. U.S. stocks; (3) mean reversion -- if U.S. outperformance since 2010 reflects extended valuations, non-U.S. stocks may outperform in future periods; (4) currency diversification -- holding assets denominated in euros, yen, etc. provides some hedge against USD weakness. The main argument against: over the past 15 years, pure S&P 500 significantly outperformed MSCI World, suggesting the "benefits of international diversification" cost returns without sufficient risk reduction.
How is the MSCI World different from MSCI ACWI?
MSCI World covers 23 developed countries only (U.S., Europe, Japan, Canada, Australia, etc.) -- no emerging markets. MSCI ACWI (All Country World Index) adds 24 emerging market countries (China, India, Brazil, Taiwan, South Korea, etc.), giving them approximately 12-15% weight. MSCI ACWI captures approximately 85% of global equity capitalization vs. developed-market-only exposure. Emerging markets add: higher growth potential (India, Indonesia), commodity exporters (Brazil, Russia historically), technology manufacturers (Taiwan, South Korea), and China's large but volatile economy. Most global equity funds benchmark against MSCI ACWI; some use MSCI World. The choice reflects whether you want true global exposure or just developed-market diversification.