The short version
- An index is a rulebook: a list of companies and how much of each to hold. An index ETF follows it.
- The big indices weight companies by stock market value, so the largest companies get the most money.
- That brings concentration. At 30 September 2026, the US was 64% of the MSCI ACWI global index, and the FTSE 100's ten biggest companies were 49% of it.
- Each index gives you different countries, currencies and industries. None is right for everyone.
Part of ETF basics. New to ETFs? Start with what an ETF is and how it works.
- 64.21%US share of the MSCI ACWI global index, 30 September 2026
- 49.49%share of the FTSE 100 in its ten largest companies, 30 September 2026
- 3.06%UK share of the FTSE All-World index, 30 September 2026
What an index is
An index is a list of companies, with rules for which get in and how much each one counts. Index providers such as MSCI, FTSE Russell and S&P Dow Jones Indices run them and publish the rules.
Indices are reviewed on a timetable. The FTSE 100 is reviewed every quarter. The FTSE All-World is reviewed twice a year, in March and September.
An index ETF aims to match its index’s return, minus costs. So choosing the ETF is mostly choosing the index.
Weighting by size
The FTSE 100, the S&P 500 and the big global indices are all weighted by market capitalisation. A company’s weight depends on its market value: its share price times the shares available to investors.
That has two effects. Bigger companies get more of your money. And when a company’s shares rise, its weight rises with them, without the fund having to trade.
Each index draws its line differently. The FTSE 100 holds the 100 largest companies on the London Stock Exchange that pass its size and liquidity screens. The S&P 500 captures about 75% of the value of the US stock market. The MSCI ACWI covers about 85% of the world’s investable shares, across 23 developed and 24 emerging countries.
Five indices side by side
| Index | Companies | Largest country | Ten largest companies | Largest sector |
|---|---|---|---|---|
| MSCI ACWI (global) | 2,414 | US, 64.21% | 25.40% | Information technology, 33.21% |
| FTSE All-World (global) | 4,204 | US, 62.28% | 24.81% | Technology, 36.11% |
| MSCI World (developed only) | 1,249 | US, 72.94% | 27.85% | Information technology, 31.78% |
| FTSE 100 (UK) | 100 | UK-listed only | 49.49% | Banks, 19.26% |
| S&P 500 (US) | 503 | US only | 38.99% | Information technology, 39.70% |
Index data is from MSCI and FTSE Russell factsheets at 30 September 2026. The S&P 500 row uses ETFs that track it. The ten largest holdings are from iShares’ Core S&P 500 ETF (30 September 2026), and the rest from SPDR’s S&P 500 ETF factsheet (September 2026).
Concentration
Weighting by size means an index mirrors the market, and markets can be lopsided.
- Countries: the US made up 64.21% of the MSCI ACWI and 62.28% of the FTSE All-World. In the developed-only MSCI World, it was 72.94%.
- Companies: the FTSE 100’s ten biggest companies made up 49.49% of the index, and HSBC alone was 10.20%. In the MSCI ACWI, the top ten were 25.40%.
- The biggest names: Nvidia was the largest company in the MSCI ACWI, at 5.11%. Nine of that index’s top ten were American.
A global index holds thousands of companies, but it isn’t evenly spread. A narrow index isn’t automatically riskier, and a broad one isn’t free of concentration. What matters is knowing what you own.
To see that concentration share by share, there is a page for eight FTSE 100 companies, one from each sector covered: HSBC, Shell, AstraZeneca, Unilever, Rolls-Royce, Rio Tinto, National Grid and Landsec. Each shows how much of the company a FTSE 100, world or sector ETF holds.
Currency exposure
A global or S&P 500 ETF bought in pounds still owns companies priced in other currencies. When the pound rises against the dollar, those holdings are worth fewer pounds, and the reverse. HSBC’s factsheet warns that assets in another currency expose you to exchange rate swings.
Buying a line priced in pounds doesn’t change this. It only changes the currency you trade in. The iShares Core MSCI World ETF, for example, has a US dollar share class that trades in London in both pounds and dollars.
Some ETFs offer currency-hedged share classes, which aim to reduce the effect of exchange rates. iShares says its MSCI World ETF’s hedged share classes use derivatives to do this.
The FTSE 100 is calculated in pounds and its companies trade in London, so there’s no conversion. But iShares describes its FTSE 100 ETF as offering globally diversified growth, because many of these companies do business worldwide.
Sector make-up
Indices differ by industry too. Using FTSE Russell’s industry classification, technology was 36.11% of the FTSE All-World but only 2.34% of the FTSE 100.
The FTSE 100 leans on other industries. Banks were 19.26% of the index, health care 11.90% and energy 11.72%.
At the other end, information technology was 39.70% of SPDR’s S&P 500 ETF. Providers classify industries in different ways, so compare like with like.
What each sector covers is explained in the 11 stock market sectors, and one company shows the scale: how much of an S&P 500 ETF Apple is.
The UK in a global index
The UK was 3.06% of the FTSE All-World and 3% of the MSCI ACWI at 30 September 2026. A FTSE 100 tracker puts all your shares in that small slice of the world market.
Holding more of your home market than its weight in the world is called home bias. The home bias guide looks at it in more detail.
The trade-offs
- A global index spreads you across thousands of companies and dozens of countries. You still get a large US weight, and most of your holdings are in currencies other than the pound.
- The FTSE 100 is priced in pounds and leans on banks, health care and energy. Ten companies make up about half of it, and technology is a small slice.
- The S&P 500 gives you about 500 large US companies, all in dollars, with a heavy weight in technology.
None of these is the right answer for everyone. Questions that help: how much do you want to depend on one country? How do you feel about currency swings? Are you comfortable with a few companies carrying a lot of weight? What else do you already hold?
Once you have chosen an index, how to buy your first ETF takes you through the order step by step.
Common questions
- Is a “world” index the same as a global one?
- Not always. The MSCI World covers 23 developed countries only. The MSCI ACWI and FTSE All-World add emerging markets such as China, India and Taiwan.
- Why is the US so big in global indices?
- Because they weight by market value, and US companies made up most of the market value these indices cover on the date checked.
- Does a FTSE 100 ETF avoid currency risk?
- Its prices are in pounds, so there’s no conversion. But many of its companies earn money abroad, so exchange rates can still affect them.
- How often do indices change?
- It depends on the index. The FTSE 100 is reviewed quarterly, in March, June, September and December. The FTSE All-World is reviewed in March and September.
- Can I see what’s inside an index?
- Yes. Index providers publish factsheets showing the largest companies, countries and sectors, and ETF providers publish their funds’ holdings.
This page explains how indices work. It isn't advice about which index or ETF you should choose. Investments can fall as well as rise, and you may get back less than you put in. For free, impartial guidance, try MoneyHelper. Read the full disclaimer.
Sources
- MSCI ACWI Index (USD) factsheet, 30 September 2026, MSCI
- MSCI World Index (USD) factsheet, 30 September 2026, MSCI
- FTSE All-World Index factsheet, 30 September 2026, FTSE Russell
- FTSE 100 Index factsheet, 30 September 2026, FTSE Russell
- iShares Core S&P 500 UCITS ETF factsheet, September 2026, BlackRock
- SPDR S&P 500 UCITS ETF (Dist) factsheet, September 2026, State Street Investment Management
- iShares Core MSCI World UCITS ETF factsheet, September 2026, BlackRock
- iShares Core MSCI World UCITS ETF product page, BlackRock
- iShares Core FTSE 100 UCITS ETF factsheet, September 2026, BlackRock
- HSBC MSCI World UCITS ETF monthly report, 31 August 2026, HSBC Asset Management
Facts checked 13 October 2026.