A Deep Dive into the iShares MSCI World ETF: Concentration and AI Momentum

MSCI World ETF US4642863926

As we move into 2026, the iShares MSCI World ETF (ticker: URTH) builds on a robust 2025 performance, navigating a financial landscape shaped by anticipated monetary easing and sustained enthusiasm for artificial intelligence. Trading near its all-time high around $187, the fund posted an annual return of approximately 21.74% last year. This strength is largely attributable to the outsized influence of U.S. technology giants within the portfolio.

Key statistics for the ETF as of early 2026 illustrate its recent trajectory:
- Current Trading Range: $186.40 – $187.80
- One-Month Performance: +0.45%
- 2025 Annual Return: +21.74%
- 3-Year Annualized Return: ~21.29%
- Dividend Yield: ~1.48% (distributing)
- One-Year Volatility: 17.38%

The fund slightly trailed broader global indices that include emerging markets in late 2025, yet it outperformed numerous actively managed strategies for the full year. Its low tracking error against the underlying MSCI World Index reflects BlackRock's efficient physical sampling replication method. Daily liquidity is strong, with average volume exceeding 300,000 shares and a typical bid-ask spread of about $0.06.

Portfolio Composition: A U.S.-Centric Approach

Despite tracking an index of 23 developed countries, URTH's holdings reveal a pronounced focus on the United States. The portfolio's top ten positions, which have seen their collective weight increase, underscore this concentration and the prevailing market narrative around AI infrastructure.

Leading Holdings (% Weight):
1. NVIDIA Corp (NVDA): ~5.50%
2. Apple Inc (AAPL): ~4.85%
3. Microsoft Corp (MSFT): ~4.11%
4. Amazon.com Inc (AMZN): ~2.67%
5. Alphabet Inc Class A (GOOGL): ~2.19%
6. Broadcom Inc (AVGO): ~1.87%
7. Alphabet Inc Class C (GOOG): ~1.85%
8. Meta Platforms Inc (META): ~1.72%
9. Tesla Inc (TSLA): ~1.53%
10. JPMorgan Chase & Co (JPM): ~1.07%

The competition for the top spot between NVIDIA and Apple highlights the market's high valuation of AI-related companies compared to traditional consumer hardware firms.

Sector and Geographic Breakdown:
- Information Technology: ~27.8%
- Financials: ~14.7%
- Health Care: ~11.7%

Geographic exposure is overwhelmingly tilted toward a single market:
- United States: ~72%
- Japan: ~5.5%
- United Kingdom: ~3.7%

This structure effectively makes URTH a "U.S.-plus" strategy, where other developed regions have minimal impact on overall returns.

Competitive Landscape and Cost Considerations

URTH operates in a crowded field of global equity ETFs. Its total expense ratio (TER) of 0.24% is a notable disadvantage compared to some broader, lower-cost alternatives.

Feature	iShares MSCI World (URTH)	Vanguard Total World (VT)	iShares Global 100 (IOO)
Expense Ratio	0.24%	0.07%	0.40%
Assets (AUM)	~$6.7 Billion	~$60 Billion	~$12 Billion
Coverage	Developed Markets Only	Developed + Emerging	Top 100 Global Mega-Caps
Replication	Physical (Sampling)	Physical (Full)	Physical
Number of Holdings	~1,320	~9,800	~100
U.S. Weighting	~72%	~64%	~78%
2025 Performance	+21.74%	+21.88%	+24.5%

Vanguard's VT offers more comprehensive diversification, including emerging markets, at a significantly lower cost. The iShares Global 100 ETF (IOO), while posting stronger returns in 2025, charges a higher fee for its concentrated mega-cap approach.

Key Catalysts and Risks for 2026

Three primary factors are poised to influence the ETF's direction in the first half of 2026:

1. May 2026 Index Review: Following the November 2025 addition of AI-adjacent firms like CoreWeave (USA) and Nebius Group (Netherlands), MSCI's next semi-annual review may address the significant valuation gap between U.S. tech and European industrial companies. Adjustments to weightings could occur if concentration limits are approached or become a regulatory focus.

2. Persistent Inflation Risk: JP Morgan assigns a 35% probability to a scenario of stubborn inflation and heightened recession risk in 2026. U.S. equities would be particularly vulnerable to a more restrictive monetary policy response. With its 72% U.S. allocation, URTH would likely experience greater downside than more globally diversified funds in such an environment.

3. Technical Price Levels: Trading near record highs, the ETF is in a phase of price discovery. Key technical markers to watch include:

   • Support around $182 (50-day moving average)
   • Psychological Resistance near the $190 level
   • A sustained break above $190 would confirm the ongoing uptrend, while a close below $175 could signal a medium-term trend reversal.

Investment Profile and Outlook

The iShares MSCI World ETF remains a well-established, though not the cheapest, vehicle for accessing large-cap companies in developed markets. Its performance is currently tightly coupled with U.S. technology stocks and the AI theme. Consequently, the fund functions less as a broad global diversifier and more as a concentrated bet on the economic resilience and technological leadership of Western industrialized nations, particularly the United States. For investors seeking exposure solely to developed markets while avoiding emerging economies, URTH serves as a core holding, albeit with significant single-country and sector concentration risks.