Riding the AI Wave: iShares MSCI World ETF Maintains Momentum

MSCI World ETF US4642863926

The iShares MSCI World ETF (ticker: URTH) is entering the new year with considerable momentum. Powered by significant gains from artificial intelligence leaders, the fund is trading near its 52-week high and has slightly outperformed its benchmark index in 2025. This performance is underpinned by a substantial allocation to US technology giants, a strategy that presents distinct opportunities alongside notable concentration risks.

URTH delivered a total return of 21.28% for 2025, edging out the 21.09% gain of its benchmark, the MSCI World Index (Net). This strength aligns with the broader index reaching record levels, fueled by a resurgence in major US technology stocks and persistent demand for AI applications. Market observers characterize the current phase as one where AI infrastructure and applications are beginning to generate scalable revenue, a trend from which the ETF's largest holdings are primary beneficiaries.

Key Fund Details:
* Assets Under Management: Approximately $6.99 billion
* Number of Holdings: Roughly 1,319 stocks from developed markets
* US Exposure: Comprises about 70% of the portfolio
* Investment Region: Exclusively developed markets (no emerging markets)

The fund's strict focus on developed nations reduces volatility associated with emerging markets but also limits participation in their potentially higher growth rates. Furthermore, the hefty US weighting means the ETF's performance is significantly influenced by US dollar fluctuations.

Portfolio Composition and Sector Weighting

A pronounced concentration in mega-cap technology defines URTH's portfolio. Its ten largest positions account for 26.87% of the fund's assets, with AI-related names featuring prominently.

Leading Holdings Include:
* NVIDIA: 5.31%
* Apple: 4.55%
* Microsoft: 4.00%
* Amazon: 2.81%
* Alphabet (Class A & C shares combined): 4.16%
* Broadcom, Meta Platforms, Tesla, and JPMorgan Chase round out the top group

NVIDIA's outsized weighting makes the ETF particularly sensitive to shifts in the semiconductor cycle and demand for AI hardware. The combined stake in Alphabet reflects the company's integral role across the AI value chain.

At the sector level, Information Technology dominates with a 26.65% allocation. The following sectors trail:
* Financials: 16.88%
* Industrials: 11.35%
* Consumer Cyclical: 10.16%
* Health Care: 9.77%

This strong tilt toward technology amplifies upside potential during AI-driven market advances but also heightens risk during downturns in the tech sector.

Returns, Trading, and Key Metrics

URTH has demonstrated close tracking to its reference index across multiple timeframes, with a marginally positive tracking difference.

Performance Data (as of December 31, 2025):
* 1 Month: +0.75% (Index: +0.81%)
* 3 Months: +3.03% (Index: +3.12%)
* 6 Months: +10.50% (Index: +10.61%)
* 1 Year: +21.28% (Index: +21.09%)
* 3 Years (annualized): +21.29% (Index: +21.17%)
* 5 Years (annualized): +12.30% (Index: +12.15%)

Deviations from the index remain within a few basis points. The fund also offers tight spreads and liquid trading:
* Median Bid-Ask Spread: 0.03%
* Average Daily Volume: Approximately 455,000 shares
* Premium/Discount to NAV: Around 0.09%

Valuation and Risk Indicators:
* Price-to-Earnings Ratio: 26.56
* Price-to-Book Ratio: 3.97
* Volatility (3-Year Standard Deviation): 11.59%
* 30-Day SEC Yield: 1.23%
* Distribution Frequency: Semi-annual

How It Stacks Up Against Global Peers

URTH competes with globally oriented ETFs that, unlike URTH, include exposure to emerging markets. Typical alternatives are the Vanguard Total World Stock ETF (VT) and the iShares MSCI ACWI ETF (ACWI).

Selected Comparison Points:

Feature	iShares MSCI World ETF (URTH)	Vanguard Total World Stock ETF (VT)	iShares MSCI ACWI ETF (ACWI)
Market Coverage	Developed Markets Only	Developed & Emerging Markets	Developed & Emerging Markets
Expense Ratio	0.24%	0.06%	0.32%
Fund Assets	$6.99 billion	$61.4 billion	$25.7 billion
Number of Holdings	~1,319	~9,889	~2,280
2025 1-Year Return	+21.28%	+24.07%	+23.68%

In 2025, URTH's return was somewhat softer than its more broadly diversified rivals, VT and ACWI. It also carries a higher expense ratio than VT. In exchange, URTH offers a pure-play focus on developed economies and a pronounced weighting of major US tech firms. This structure results in performance that more closely mirrors US large-cap indices compared to broader global ETFs.

Outlook and Technical Considerations

Several factors are poised to influence the ETF in the coming quarters:
* The MSCI World Index undergoes quarterly reviews; the next rebalancing is scheduled for February 2026. Shifts in the weightings of major technology stocks could directly alter URTH's composition.
* US dollar exchange rate movements remain relevant for investors outside the dollar bloc, as they immediately impact fund returns.
* Current valuations sit above long-term averages, with the P/E ratio of 26.56 reflecting high earnings expectations.
* The ETF exhibits a beta of 0.95, indicating slightly lower volatility than the broad US market.

From a chart perspective, a key support zone resides around the $180 level. The 52-week trading range spans from $136.34 to $189.95, with the current price action hovering in the upper portion of this band following a robust 2025.