Major Stock Market Indexes UK Investors Should Know

A stock market index is just a recipe for averaging the performance of a chosen group of companies, and almost every passive ETF you can buy in the UK tracks one.

For most UK investors, three indexes do almost all the heavy lifting: the FTSE All-World, the MSCI World, and the S&P 500. The others are slices of those.

Each index has hidden biases. The S&P 500 is roughly 30% tech. The FTSE 100 is heavy on energy, banks and miners. The MSCI Emerging Markets is dominated by Taiwan, China and India.

Long-run real returns from broad equity indexes have been roughly 5-7% per year over the past century, but that average hides huge multi-year drawdowns and decade-long underperformance for individual indexes.