Significant Portfolio Reshuffle Ahead for iShares MSCI World ETF

iShares MSCI World ETF (URTH) to rebalance on Feb 27, 2026, adding 18 stocks like AST SpaceMobile and removing 27, including DocuSign. Final adjustment before methodology changes.

A major rebalancing is on the horizon for the iShares MSCI World ETF (URTH). The fund, which holds approximately $6.9 billion in assets, is set to implement the results of MSCI's latest index review, leading to a notable shift in its holdings. This quarterly adjustment, scheduled for the market close on February 27, 2026, will see an asymmetric change with 18 new securities entering the portfolio and 27 existing positions being removed.

Index Changes Drive Fund Activity

MSCI Inc. announced the results of its February index review on February 10. The changes to the MSCI World Standard Index, which the URTH ETF tracks, will become effective on February 27. While the estimated one-way turnover for the broader MSCI World Investable Market Index is a modest 0.3%, the specific additions and deletions for the standard index are significant.

The three largest additions by market capitalization are all U.S.-based firms. They include AST SpaceMobile, a company providing satellite-based telecommunications for mobile devices; Coherent Corp, a supplier of optical hardware for data centers and AI infrastructure; and FTAI Aviation, which specializes in engine leasing and modular maintenance.

Conversely, several prominent U.S. names are slated for removal. The list of deletions features DocuSign, Dynatrace, Nutanix, Paycom Software, Booz Allen Hamilton, Baxter International, Brown-Forman, and American Homes 4 Rent. Analysts note that the high number of U.S. exits primarily reflects these companies falling below the required market capitalization thresholds for index inclusion.

A Transitional Phase Before Methodology Shifts

This rebalancing carries added strategic weight as it represents the final adjustment under the current framework before a methodological revision. On January 27, MSCI stated that only essential free-float adjustments would be implemented in February. More comprehensive changes are postponed until May 2026, when a revised free-float rounding methodology takes effect.

In a separate but relevant announcement on January 6, MSCI confirmed it would not implement its earlier proposal to exclude companies with digital assets from its indexes. Instead, the index provider plans a broader consultation on the treatment of non-operating companies. Firms with more than 50% of their balance sheet comprised of digital assets will retain their index membership for the time being.

ETF Profile and Performance Metrics

As of February 23, the iShares MSCI World ETF reported a net asset value (NAV) of $189.50. The fund's total assets under management stood at roughly $6.86 billion, supported by 36.2 million shares outstanding. URTH maintains an expense ratio of 0.24% and holds a diversified portfolio of 1,320 securities.

Key valuation and risk metrics for the fund include a price-to-earnings ratio of 25.32 and a price-to-book ratio of 3.85. Its three-year standard deviation was 11.12% as of the end of January, with an equity beta of 0.93. The NAV total return since the start of the year was 2.12%.

Anticipated Trading Dynamics Around Implementation

Passive funds like URTH that replicate the MSCI World Index must execute their trades around the February 27 effective date to minimize tracking error. This activity typically generates predictable volume surges in the affected securities, as a wave of passive capital simultaneously buys the new additions and sells the deletions.

Market observers point to a potential imbalance: the concentration of the three largest additions in U.S. technology and industrial sectors contrasts with the selling pressure from the disproportionately high number of U.S. deletions. This asymmetry is likely to create short-term volume disparities in these stocks leading up to the implementation date.

The upcoming adjustment marks the end of an era for the index's calculation method. The more substantial spring rebalancing in May, incorporating the new free-float rounding rules, is expected to bring broader compositional changes to the MSCI World Index.