MSCI World ETF: Tech Tumble Overshadows Oil Drop and Healthcare Rally

Technology selloff dragged the MSCI World ETF to a weekly loss, despite healthcare surging nearly 5% and oil sliding. MSCI kept South Korea as emerging market.

Healthcare stocks jumped nearly 5% last week, oil prices slid on easing Middle East tensions, and European investor sentiment ticked higher. Yet none of it was enough to rescue the MSCI World ETF from a sharp weekly loss, as a multi-day rout in technology shares dragged the broad market lower.

The selloff, concentrated between June 23 and June 25, hit the fund’s largest holdings particularly hard. The iShares MSCI World ETF closed the week at $197.36, down 2.65% on the week, according to one report. Another source quoted the fund at $199.40 with a milder 1.64% decline, reflecting slight discrepancies in tracking or reporting. The 14-day relative strength index slipped to 41.7, while a broader RSI reading stood at 46.5, indicating a neutral to slightly bearish posture.

The trigger was a renewed debate over whether the massive capital spending on artificial intelligence infrastructure will ever generate adequate returns. Adding fuel to the fire, Apple raised prices on Macs and iPads because of higher storage-chip costs, and reports hinted that OpenAI’s initial public offering could be delayed until 2027. In Asia, the selloff was so severe that the South Korean KOSPI triggered a trading halt.

Technology accounts for 31.31% of the fund’s portfolio, and heavyweights such as Nvidia, Apple, Microsoft, Amazon and Alphabet all came under pressure. That concentration has amplified volatility: the annualized 30-day volatility stands at 14.36%. Over the past decade, the concentrated bet on developed-market tech and growth stocks has paid off handsomely, delivering a 12.1% annualised return. But the flip side of that strategy is a rough ride when the sector turns. Other global ETFs spread risk across more than 10,000 positions; the MSCI World ETF holds roughly 1,300 large- and mid-cap names from developed economies, with a heavy US tilt.

Away from the tech drama, index provider MSCI disappointed investors hoping for an upgrade of South Korea to developed-market status. MSCI chief Henry Fernandez cited the won’s restrictive trading hours — the currency can only be traded during Seoul’s local exchange window — as a key hurdle. South Korea plans to introduce round-the-clock dollar-won trading from July 2026, but MSCI doubts there will be sufficient liquidity during night hours to satisfy global institutional investors. As a result, Korean equities remain in the emerging-market category and the MSCI World ETF keeps its current geographic composition.

The broader macro backdrop offered mixed signals. The reopening of the Strait of Hormuz after a US-Iran agreement sent Brent crude down to around $73 a barrel. In the eurozone, investor sentiment ticked up in June, though high energy prices still weigh on the recovery. Meanwhile, the healthcare sector’s near-5% gain provided a brief counterpoint to the tech weakness.

The fund, managed by BlackRock, tracks the MSCI World Index, which covers roughly 85% of the market capitalisation of developed markets. It holds about $7.9 billion in assets and charges an annual expense ratio of 0.24%. Morningstar gives it a Gold rating, its top accolade.

With the RSI hovering in neutral territory, chart watchers are looking for the next catalyst. The major US technology companies are due to report quarterly results from mid-July, and those numbers will go a long way toward determining whether the market’s scepticism over AI investment is justified — or whether the recent correction was simply a painful pause in a longer uptrend.