The iShares MSCI World ETF (URTH) has delivered substantial returns, largely fueled by the artificial intelligence boom and the overwhelming influence of major U.S. technology corporations. Through November 2025, this $6.54 billion fund achieved an impressive 18.77% year-to-date performance. However, its substantial 72.19% allocation to U.S. equities raises questions about its true global diversification credentials.
Performance and Volatility: A Dual Narrative
Investors have been rewarded with strong results across multiple time horizons. The fund posted a 17.46% one-year return and a notable annualized three-year gain of 23.98%.
This performance comes with a caveat. A three-year standard deviation of 13.05% indicates significant price fluctuations. The price-to-earnings ratio of 25.55 suggests elevated valuations, a particular concern given the fund’s composition. On a positive note, its beta of 0.95 reveals it has been marginally less volatile than the broader U.S. market.
A Portfolio Dominated by Tech Titans
An examination of the fund’s largest holdings reveals a pronounced concentration in the technology sector. The top ten positions are overwhelmingly tech-oriented, with NVIDIA leading at 5.31%, followed by Apple (5.05%) and Microsoft (4.14%). Collectively, these three companies constitute over 14% of the entire fund.
This technological focus extends beyond pure-play tech firms:
* Amazon.com represents 2.71% of the portfolio
* Alphabet’s Class A and C shares combine for approximately 4%
* Other significant tech exposures include Meta, Tesla, and Broadcom
* JPMorgan Chase stands as the sole non-technology company among the top ten holdings
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This heavy weighting proved advantageous in 2025, as NVIDIA’s AI-driven surge significantly boosted the ETF’s overall returns. Nevertheless, this sector concentration introduces substantial risk, especially considering current valuation levels.
The “World” ETF with a American Focus
Despite its global mandate, the fund’s geographical distribution is heavily skewed. U.S. companies dominate with a 72.19% share, while Japanese and British equities contribute just 5.40% and 3.56%, respectively. This allocation reflects global market capitalization rather than offering genuine geographical diversification.
The Cost Disadvantage
A notable weakness for URTH is its expense ratio. At 0.24%, the fund is significantly more expensive than competing products like the Vanguard FTSE Developed Markets ETF (VEA), which charges a mere 0.03%. This creates an annual cost disadvantage of 0.21 percentage points for investors.
From a liquidity perspective, the fund remains robust. It holds $6.54 billion in assets and trades over 400,000 shares daily. Premiums or discounts to its net asset value are typically contained within 0.08%.
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