A Focused Approach to Developed Markets: Analyzing the iShares MSCI World ETF

MSCI World ETF US4642863926

For investors seeking targeted exposure to established economies, the iShares MSCI World ETF (ticker: URTH) presents a compelling option. The fund concluded 2025 with robust performance, posting a 21.28% annual gain, and has carried this momentum into the new year with an approximate 2% advance year-to-date. Its strategy is defined by a deliberate concentration on developed markets and major U.S. technology equities.

The ETF tracks the MSCI World Index (Net), providing coverage of roughly 85% of the market capitalization in developed equity markets. A defining characteristic is its pronounced tilt toward the United States, which constitutes over 72% of the portfolio. This focus inherently excludes emerging markets, distinguishing URTH from broader "All-World" investment products.

Top Country Allocations:
* United States: 72.19%
* Japan: 5.40%
* United Kingdom: 3.56%
* Canada: 3.27%
* France: 2.64%
* Germany: 2.39%
* Switzerland: 2.25%
* Australia: 1.64%

Sector allocation further emphasizes growth-oriented industries, with Information Technology commanding a 27.27% share. Financials (16.75%) and Industrials (11.15%) round out the top three sectors. The significant weighting in U.S. tech has been a primary driver of the fund's recent returns.

Portfolio Composition and Key Metrics

URTH offers diversification across 1,320 individual stock positions from 23 developed nations. However, its top holdings reveal a concentration in American mega-cap leaders. The ten largest positions collectively account for 26.45% of the fund's assets.

Leading Portfolio Holdings:
1. NVIDIA: 5.36%
2. Apple Inc.: 4.52%
3. Microsoft: 3.80%
4. Amazon: 2.70%
5. Alphabet (Class A): 2.28%
6. Alphabet (Class C): 1.92%
7. Broadcom: 1.82%
8. Meta Platforms: 1.59%
9. Tesla: 1.46%
10. JPMorgan Chase: 1.00%

NVIDIA's position at the top, with a 5.36% weighting, reflects the artificial intelligence-driven semiconductor surge witnessed in 2024 and 2025. Collectively, the stocks often referred to as the "Magnificent Seven" represent over 20% of the portfolio.

The fund's valuation ratios underscore its growth profile, with a Price-to-Earnings (P/E) ratio of 26.66 and a Price-to-Book (P/B) ratio of 3.98. As of mid-January 2026, the trailing 12-month total return stands at approximately 24.28%.

Performance and Risk Characteristics

URTH demonstrates tight tracking to its benchmark index. Performance figures as of December 31, 2025, are as follows:

• 1 Month: 0.75% (Benchmark: 0.81%)
• 3 Months: 3.03% (Benchmark: 3.12%)
• 6 Months: 10.50% (Benchmark: 10.61%)
• Calendar Year 2025: 21.28% (Benchmark: 21.09%)
• 3-Year Annualized: 21.29% (Benchmark: 21.17%)
• 5-Year Annualized: 12.30% (Benchmark: 12.15%)

From a risk perspective, the fund's 3-year standard deviation (volatility) is 11.59%. Its beta relative to the S&P 500 is 0.95, indicating slightly lower fluctuation intensity than the broad U.S. market. On the income side, the 30-day SEC yield is 1.24%, and the trailing 12-month dividend yield is 1.49%.

Fund Structure, Costs, and Liquidity

The ETF utilizes a physical replication strategy, directly holding the underlying index securities. It distributes dividends semi-annually, with the most recent distribution of $1.49517 per share paid in December 2025. The MSCI World Index is rebalanced semi-annually in May and November, with the next major review scheduled for May 2026.

With assets under management (AUM) of $6.97 billion, URTH charges a Total Expense Ratio (TER) of 0.24%. It exhibits strong liquidity, evidenced by a narrow 30-day median bid-ask spread of 0.03% and an average daily trading volume of nearly 395,000 shares. The fund currently trades near its 52-week high of $189.95, with a Net Asset Value (NAV) of $189.29.

Comparative Analysis with Global Alternatives

Investors often weigh URTH against global ETFs that include emerging markets. Key competitors include:

ETF (Ticker)	Benchmark Index	AUM	Expense Ratio	Holdings	2025 Return	Includes EMs?
iShares MSCI World (URTH)	MSCI World	$6.97B	0.24%	1,320	21.28%	No
iShares MSCI ACWI (ACWI)	MSCI ACWI	$26.37B	0.32%	2,277	22.43%	Yes
Vanguard Total World Stock (VT)	FTSE Global All Cap	$62.37B	0.06%	9,957	22.44%	Yes

URTH's cost structure sits between the very low-cost VT (0.06%) and the more expensive ACWI (0.32%). By omitting emerging markets, URTH maintains a focused portfolio on developed economies. In contrast, VT offers the most extensive coverage, including small-cap stocks and emerging markets across nearly 10,000 holdings, while ACWI includes emerging markets but with less breadth than VT.

Conclusion: Strategic Exposure with Inherent Concentration

The iShares MSCI World ETF provides a liquid and efficient vehicle for accessing developed market equities with broad diversification across companies but focused geography. Its strong 21.28% return in 2025 was significantly propelled by the outperformance of dominant U.S. technology firms. This very strength, however, introduces a notable concentration risk due to the heavy allocations to both the U.S. market and the tech sector. The conscious exclusion of emerging markets defines its profile, offering a purer play on developed economies compared to more comprehensive global funds like ACWI and VT.