All-world ETF vs global all-cap ETF: what’s the difference?
What’s the difference between an all-world ETF and a global all-cap ETF? Both offer a simple way to invest in global stock markets, but they don't invest in exactly the same companies. Learn how they compare and which one could be right for you.
If you've been comparing global exchange-traded funds (ETFs) after deciding they’re the right choice for you, you've probably come across two similar-sounding names: “all-world” and “global all-cap”.
At first glance, they might seem the same because both give you exposure to companies around the world through a single investment. Both offer broad diversification and can serve as the foundation of a long-term portfolio.
But the difference comes down to one thing: the size of the companies they invest in.
What's the difference?
An all-world ETF invests in large and medium-sized companies across developed and emerging markets.
A global all-cap ETF does the same, but it also includes smaller companies (called “small caps”). That may sound like a small distinction, but it significantly increases the number of companies held.
The Vanguard FTSE All-World UCITS ETF, for example, invests in around 3,700 companies while the recently launched Vanguard FTSE Global All-Cap UCITS ETF aims to invest in more than 7,000 companies.
Does it matter?
It depends on how much of the global stock market you want to capture.
Because global all-cap ETFs include smaller companies alongside large and medium-sized ones, they offer broader coverage of the global stock market.
While it’s possible to invest in an ETF that specifically focuses on smaller companies, such as the Vanguard FTSE Global Small-Cap UCITS ETF, some investors may prefer to access companies of all sizes through a single global all-cap ETF.
Key differences at a glance
Vanguard FTSE All-World UCITS ETF
- Invests in large and medium-sized companies across developed and emerging markets.
- Includes around 3,700 companies.
Vanguard FTSE Global All-Cap UCITS ETF
- Invests in companies of all sizes across developed and emerging markets – from the world's largest companies to smaller businesses.
- Aims to invest in more than 7,000 companies, giving broader coverage of the global stock market.
Learn more about our global ETF range.
Investment risk information
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall. Investments in smaller companies may be more volatile than investments in well-established blue-chip companies.
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For further information on risks please see the “Risk Factors” section of the prospectus on our website.
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