The MSCI World ETF’s Heavy Reliance on Tech Stocks

MSCI World ETF US4642863926

The iShares MSCI World ETF (ticker: URTH) has continued its upward trajectory into early 2026, with its assets under management approaching the $7 billion threshold. This robust performance, however, comes with a notable concentration risk: nearly 30% of the fund's portfolio is allocated to technology companies, spearheaded by NVIDIA, which alone commands a weighting exceeding 5%.

Key Fund Details:
* Assets Under Management: Approximately $6.97 billion
* 2025 Annual Performance: +21.28%
* Expense Ratio: 0.24%
* Number of Holdings: 1,321 stocks

Data from BlackRock as of January 29, 2026, reveals a clear sector hierarchy within the ETF. Information technology dominates, accounting for 28% of the portfolio. Financial services and healthcare follow at roughly 17% and 10%, respectively.

The fund's top five holdings underscore this significant tilt toward the tech industry:
* NVIDIA: Approximately 5.2%
* Apple: Approximately 4.4%
* Microsoft: Approximately 3.8%
* Amazon: Approximately 2.7%
* Alphabet (Class A & C shares): Combined weighting of about 4.1%

Alongside other mega-cap names like Broadcom, Meta, and Tesla, these equities drive a substantial portion of the fund's overall returns.

Evaluating Cost Competitiveness

A January 24, 2026 analysis by The Motley Fool highlighted URTH's cost structure relative to peer funds. Its 0.24% expense ratio is notably higher than alternatives such as the Vanguard Total World Stock ETF (0.06%) or the Schwab International Equity ETF (0.03%). These competing funds also manage significantly larger asset bases.

A key differentiator for URTH is its exclusive focus on developed markets, completely excluding exposure to emerging economies. With a fund size of just under $7 billion, it appears modest next to Vanguard's $71 billion or Schwab's $57 billion offerings tracking similar benchmarks.

Geographic Concentration: A Double-Edged Sword

The ETF's geographic allocation shows a heavy overweight to the United States. Japan and the United Kingdom trail distantly behind. This structure creates a close correlation with the U.S. equity market, particularly its technology sector.

The Motley Fool's analysis suggested this U.S.-centric positioning could offer stability during potential trade negotiations, insulating the fund from more severe negative impacts. The fund currently trades at a price-to-earnings ratio of 26.44 and a price-to-book ratio of 3.94, with a three-year standard deviation of 11.59%.

Performance and Mechanics

The fund employs a physical replication strategy to track the MSCI World Index, meaning it holds the underlying securities rather than using derivatives. As of December 31, 2025, its 12-month yield was 1.49%, with a 30-day SEC yield of 1.24%. Dividends are distributed on a semi-annual basis.

Following a 21.28% gain in 2025, the ETF has now delivered three consecutive years of strong performance, building on returns of 18.72% in 2024 and 23.93% in 2023.

Investors should note several factors influenced by the index's quarterly rebalancing. Technology sector earnings reports have an outsized impact on the ETF's performance. Furthermore, currency fluctuations directly affect returns due to the fund's broad international exposure. Finally, monetary policy decisions by major developed-market central banks particularly influence the heavily weighted financial sector within the portfolio.

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