Which savings plan is the right one for your wealth accumulation
The S&P 500 Index comprises the 500 largest listed companies in the USA that generate around 40% of their sales outside the USA. The MSCI World Index comprises around 1600 companies from developed countries around the world.
The S&P 500 therefore focuses exclusively on US companies, while the MSCI World offers a broader geographical diversification (but with approx. 70% US share).
Over the past ten years, however, the S&P 500 has clearly outperformed the MSCI World with an average annual return of 16.15%. This compares with an average annual return of 12.89% for the MSCI World.
The costs for the S&P 500 amount to 0.07 percent, compared to 0.20 percent for the MSCI World.
Criticism of the S&P500, high valuations, limited diversification and high concentration.
Clearly a matter of taste, but anyone looking for concentration and a higher return should invest in the S&P500.
What do you say S&P500 or MSCI World?
I myself have opted for the S&P500 ETF from Vanguard. I think the USA will continue to be the leader, because the USA is a stock and business-friendly country, which also entices top companies to set up a base there.
-low cost -higher yield -sufficiently diversified -long-term growth potential
