One Year After the Tariff Truce, the Vanguard All-World ETF Hovers Just Shy of a Record

The Vanguard FTSE All-World UCITS ETF trades near its 52-week peak, driven by tech gains despite geopolitical caution and tariff uncertainties ahead of Trump-Xi talks.

The Vanguard FTSE All-World UCITS ETF is trading within a whisker of its 52-week peak, having closed at 158.14 euros against a high of 158.54 euros. That ceiling comes exactly twelve months after the landmark US-China tariff compromise of 12 May 2025, an agreement that calmed global equity markets and set the stage for a 21% annual gain in the fund. Over the past 30 days alone, the ETF has added 5.81%, powered by a recovery from April’s lows.

Underpinning the advance is a sharp divergence between sectors. The FTSE All-World index has risen roughly 7% year-to-date, with technology companies – which make up a quarter of the benchmark – delivering the lion’s share. Earnings from heavyweight US and Asia-Pacific tech firms have sustained the momentum, while healthcare stocks have lagged markedly. The ETF’s own annualised performance stands at 8.33%, slightly outpacing the index. Still, the rally is showing signs of exhaustion: the relative strength index sits near 67, flirting with overbought territory.

That technical warning comes against a backdrop of cautious geopolitics. In February 2026 the US Supreme Court overturned earlier punitive tariffs, prompting President Trump to announce a flat 10% levy. China, paradoxically, benefited from the legal shift because the original duties had been far higher. Now attention turns to a planned meeting between Trump and Xi Jinping in mid-May, where negotiations will cover artificial-intelligence guidelines, agricultural purchases and a possible extension of the current tariff truce. The index’s heavy technology weighting – led by Apple, Microsoft and Nvidia – makes it acutely sensitive to any disruption in cross-border supply chains.

The ETF’s broad composition helps absorb such regional shocks. The underlying FTSE All-World index tracks roughly 4,200 stocks, of which the US accounts for about two-thirds and China around 3%. Vanguard uses an optimised physical replication strategy, buying a representative sample of shares rather than every single constituent, which keeps transaction costs down. The fund holds 3,745 positions as of the latest filing, and its one-year tracking error has been just 0.03%. Total expense ratios are a slender 0.19% per year.

Assets under management underscore the fund’s scale. The accumulating share class alone oversees $41.8 billion, while the combined volume across all share classes reaches nearly $66 billion. (One earlier report cited total assets of $57 billion, reflecting differences in reporting periods.) Dividends are reinvested into the portfolio, compounding returns automatically for buy-and-hold investors.

Currency dynamics add another layer. The US dollar, after declining in April, stabilised in May, which benefits euro-denominated holders of the ETF. Factor strategies such as value and momentum reversed course during the month, but for a broad index tracker these shifts are largely immaterial. The fund mirrors the market; it does not bet on style tilts.

Looking ahead, US officials are preparing fresh import tariffs on Chinese goods for the second half of 2026, and Beijing is expected to retaliate. Each new round of trade friction could rattle tech stocks in particular. Yet the Vanguard All-World ETF’s geographic diversification, combined with a 30-day gain of 5.81% and a distance of over 9% from its 200-day moving average, suggests that the rally still has room to run – provided the upcoming summit does not derail the fragile trade détente.