The hardest part of passive investing isn't the strategy. It's staying in.
It's all about the long term. Since its base date of December 31, 1986, the FTSE All-World has lived through the 1987 crash, the Tech Bubble, the Great Financial Crisis, and a Pandemic. Through it all, it has averaged ~8.5% per year. We aren't just looking at stocks. We are looking at 40 years of global resilience.
But when markets fall, that resilience is invisible. A passive fund can feel like a theoretical construct. It's hard to feel connected to something so abstract compared to owning an individual stock. And the investment industry is very good at convincing us we're among the few who can beat market averages or that we know which active fund manager to back.
The truth is, 90% of professionals can't beat the index over time (after fees). So we don't try to.
Instead, every week we pull one company at random from the FTSE All-World — a collection of 4,200 companies representing 90% of the world's investable equity market. We explore what it actually does: its products, its history, its place in the world. By understanding the companies we already own, one at a time, the goal is to make the index feel real. To give passive investors something concrete to hold onto when conviction is hardest.
There'll be surprises. Follow us on a journey to discover what's in there.
How we pick companies
We select one company at random from the FTSE All-World Index, rotating weekly through four regions:
North America: ~750 companies. Mostly US, some Canada.
Europe: ~650 companies. The "Old World" giants.
Developed Asia-Pacific: ~600 companies. Japan, Australia, Singapore, HK, South Korea…
Emerging Markets: ~2,200 companies. China, India, Taiwan, Brazil, South Africa, Saudi Arabia…
Emerging Markets account for ~2,200 of the 4,200+ companies but only around 10% of the index by weight. So we feature one every four weeks.
Time in the market beats timing the market
The best strategy for most of us is to invest regularly and passively in a diversified equity index. Since we can't invest in the index directly, it's done through low-fee funds from providers like Vanguard, BlackRock (iShares), State Street, Invesco, and Amundi. The big names are split between MSCI and FTSE as their underlying index, so your fund may track either one.
We're not index maximalists and we do own shares in private companies and individual stocks. But we believe the foundation of everyone’s investment portfolio should be a passive, broadly diversified world equity index fund. We applaud those who take the single world fund approach.
The main index options for global passive investors:
MSCI ACWI: ~2,500 large- and mid-cap stocks across developed and emerging markets
MSCI ACWI IMI: ~8,800 stocks, adding small-caps to the above
FTSE All-World: ~4,200 large- and mid-cap stocks; the index we use here
For this newsletter, we chose the FTSE All-World. Its base date of December 31, 1986 gives us nearly 40 years of reliable data, built on its predecessor, the FT-Actuaries World Index.
The numbers, in context
$10,000 invested on December 31, 1986 at ~8.5% annualized would have grown to approximately $244,000 by March 2026, roughly 39 years of compounding. Here are the approximate annualized returns:
Last 10 years from 2016: ~12.8%
Last 20 years from 2006: ~9.1%
Last 25 years from 2001: ~8.4%
Returns vary slightly depending on currency and taxes on distributions. We'll update these numbers quarterly.
At the top of every edition, we show these long-term returns as a reminder of what we're here for: the long term, and the conviction to stay the course.