Major Portfolio Reshuffle for iShares MSCI World ETF

The iShares MSCI World ETF faces a major quarterly rebalancing with 18 new stocks and 27 deletions. This is the last review before a significant methodology shift in May.

The iShares MSCI World ETF is set for what is likely the most significant quarterly index rebalancing of the year. Effective at the close of trading on Friday, the underlying MSCI World Index will see 18 new additions and 27 deletions. This rebalancing is particularly notable as it represents the final review under the current MSCI methodology before a major overhaul scheduled for May.

A Net Reduction in Constituents

According to the official February index review published on February 10, the MSCI World Standard Index will shrink by a net nine companies. The largest new entrants by full market capitalization include AST SpaceMobile, Coherent, and FTAI Aviation. Other US-based additions are Casey’s General Stores, Curtiss-Wright, Lumentum Holdings, IREN, and Revolution Medicines.

The list of deletions is considerably longer, with 15 US companies alone being removed. Among the more recognizable names exiting are DocuSign, Paycom Software, Booz Allen Hamilton, Baxter International, Nutanix, Brown-Forman, Dynatrace, and JM Smucker. Several real estate holdings are also departing, including Alexandria Real Estate, American Homes 4 Rent, and BXP.

MSCI estimates the "one-way turnover" for the broader MSCI World Investable Market Index at 0.3%.

Global Rebalancing Extends Beyond US Markets

Changes are distributed across multiple regions. Japan will see two inclusions (Ibiden, Shimizu) and four exclusions, such as Tokyo Metro and Trend Micro. Taiwan loses four index members while gaining one.

In Europe, the United Kingdom adds Airtel Africa but loses DCC and Hikma Pharmaceuticals. Sweden gains Verisure, and Austria adds the BAWAG Group. Saudi Arabia loses three companies without any new additions.

At the level of the overarching MSCI ACWI (All Country World Index), MSCI tallies the adjustments to 63 additions and 61 deletions.

Upcoming Methodology Shift Adds Significance

Why is this quarterly review so critical? On January 27, MSCI announced it would implement only "significant" free-float adjustments this time. The index provider aims to reduce potential counter-movements in trading volume with this approach, preparing for a revised free-float rounding logic planned for May.

Furthermore, MSCI confirmed on January 6 that a previously discussed removal of "Digital Asset Treasury Companies" (DATCOs) from the Global Investable Market Indexes will not proceed. Instead, a broader consultation on the treatment of non-operating companies will be launched. For the February review, the current rules remain in place, even for firms whose digital asset holdings constitute 50% or more of total assets.

Parallel consultations are ongoing regarding potential market reclassifications for Bulgaria and the MSCI Greece Index, with feedback accepted by MSCI until March 31.

Trading Activity and Implementation Timeline

The iShares ETF closed yesterday at $192.37, marking a 52-week high. As of Tuesday, the fund's volume was approximately $6.96 billion with 1,320 holdings. Its total expense ratio is 0.24%, and the price-to-earnings ratio was listed at 25.03, according to BlackRock data.

Notably, yesterday's trading volume reached 539,127 shares, significantly above the 30-day average of 378,292—a surge timed with the impending index changes.

Index-tracking funds must implement the adjustments by the market close on Friday. The new index composition will officially take effect on Monday, March 2, 2026. The next structurally larger shift is scheduled for May, according to MSCI, when the revised free-float rounding methodology is set for introduction. This change holds the potential for noticeably more extensive reshuffling within the MSCI World universe.