MSCI World ETF’s 2025 Rally Fueled by Tech Sector Strength

MSCI World ETF US4642863926

As of mid-December 2025, the iShares MSCI World ETF (URTH) is demonstrating robust performance, having advanced approximately 20.5% since the start of the year. This gain underscores the resilience of developed market equities, which have weathered initial concerns regarding U.S. trade policy and tariff announcements from earlier in the spring.

The fund, which holds 1,320 individual securities, maintains a pronounced focus on large U.S. companies. Nearly 70% of its total allocation is dedicated to American equities, with international markets such as Japan, the United Kingdom, and Canada serving primarily to provide diversification. The technology sector constitutes roughly 24% of the portfolio, while financials account for an additional 15%.

A notable characteristic is the concentration within its top holdings. The ten largest positions collectively represent 27.8% of the portfolio. This creates a dynamic of both significant opportunity and heightened reliance on a select group of performers.

Leading individual holdings include:
1. Nvidia (5.3%)
2. Apple (4.9%)
3. Microsoft (4.2%)
4. Alphabet (4.1% combined share classes)
5. Amazon (2.7%)

Artificial Intelligence Investments Provide Momentum

The dominant narrative driving returns in the fourth quarter of 2025 continues to be technological transformation, specifically artificial intelligence. Investor attention remains fixed on this theme even as labor market data indicates some moderation, with the unemployment rate stabilizing at 4.4%. Projected hyperscaler investments are anticipated to reach $450 billion in 2025, providing a tailwind for semiconductor and software companies within the fund's universe.

Should investors sell immediately? Or is it worth buying MSCI World ETF?

However, recent volatility in chip stocks such as Broadcom and Nvidia suggests the market is engaging in more critical valuation assessments. Noticeable corrections occurred in early December, which investors are interpreting as a potential recalibration ahead of 2026.

Fund Mechanics and Cost Profile

URTH offers solid liquidity, with an average daily trading volume exceeding 270,000 shares. The bid-ask spread typically remains around 0.02%, and the ETF trades close to its net asset value of $186.04 per share.

Its expense ratio of 0.24% positions it in the mid-range for such products. This is higher than some ultra-low-cost alternatives for global equity exposure but is generally considered appropriate for a fund of its substantial size and liquidity profile. The fund's assets under management currently stand at $6.6 billion.

Cautious Outlook for the Coming Year

A November rebalancing of the underlying MSCI World Index introduced 69 new constituents, slightly reducing overall concentration. Despite this adjustment, the overwhelming influence of technology mega-caps persists.

The critical question for 2026 is whether the massive capital flowing into AI development will translate into sustained corporate profitability. The alternative scenario is that valuation adjustments may temper the sector's remarkable ascent. The performance of these key holdings will likely remain the primary determinant of the ETF's trajectory in the near term.