A Shift in Global Exposure: MSCI World ETF Trims US Holdings

In a notable departure from recent trends, the iShares MSCI World ETF concluded its first quarterly rebalancing of 2026 at the end of February by reducing its allocation to US equities. This adjustment, while significant, is viewed by market observers as a preliminary move ahead of a more substantial index methodology overhaul scheduled for later in the year. The rebalance also revealed a growing emphasis on companies involved in artificial intelligence hardware and satellite communications.

Rebalancing Signals a Cautious Pause

The fund’s quarterly review, implemented on February 27, resulted in a net reduction of nine holdings. A total of 18 new companies were added to the portfolio, while 27 were removed. The shift was particularly pronounced for US stocks, which saw only eight additions compared to 15 deletions.

This relative pullback is attributed to a communicated change in index construction rules. MSCI announced on January 27 that the February review would be limited to essential free-float adjustments. The major transformation is slated for May 2026, when new calculation rules for determining a company’s freely tradable share proportion will take effect.

Leading the list of new US additions by market capitalization were AST SpaceMobile A, Coherent Corp, and FTAI Aviation—firms with operations tied to satellite-based connectivity or AI infrastructure. Companies removed from the index included Japan’s Tokyo Metro and Trend Micro, alongside the French payment solutions provider Edenred.

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Core Holdings Remain, But Change Looms in May

For now, the fund’s core structure stays intact. Nvidia (5.47%), Apple (4.53%), and Microsoft (3.58%) continue to be its dominant holdings. The ETF tracks the MSCI World Index, which captures approximately 85% of the market capitalization across developed markets, excluding emerging economies like China and India. Morningstar has awarded the fund, which holds 1,320 positions and carries an expense ratio of 0.24%, its Bronze medal rating.

Analysts note that the February changes were deliberately modest. The impending methodology reform in May is expected to drive far more profound shifts in the index’s composition. A key question remains whether the new calculation standards will alleviate the fund’s high concentration in a handful of mega-cap stocks or largely preserve the current status quo.

Looking Ahead: The Major Reshuffle is Yet to Come

While the February rebalancing marks a change in direction, it is essentially a prelude. The comprehensive May revision, incorporating updated free-float and rounding rules, is projected to alter index weightings much more significantly. The ultimate impact on the prevailing dominance of the technology sector’s largest players will be closely watched by investors globally.