The iShares MSCI World ETF (URTH) continues its remarkable upward trajectory, having already advanced 18.92% during 2024. This sustained rally finds its primary drivers in technology behemoths including NVIDIA, Apple, and Microsoft, though market observers question how long the artificial intelligence enthusiasm can maintain its current pace.
Unprecedented Concentration in Tech Titans
A notable characteristic of this ETF’s composition is its significant weighting toward technology corporations. Three holdings alone account for substantial portions of the fund:
- NVIDIA commands a 5.56% allocation – positioning this AI frontrunner as the fund’s leading component
- Apple maintains a 4.71% weighting – demonstrating resilience despite recent iPhone sales challenges
- Microsoft represents 4.55% – benefiting substantially from its Azure cloud platform and AI integration strategies
Collectively, these three positions constitute 14.82% of the entire ETF. When examining the top ten holdings, the concentration becomes even more pronounced at 27% of the fund’s total assets – a remarkable figure for an investment vehicle tracking a broadly diversified global index.
The technology dominance extends beyond these three giants. Additional tech exposure comes from Amazon (2.61%), Meta Platforms (1.90%), and the combined Alphabet share classes (3.25%). Tesla’s 1.55% allocation and JPMorgan Chase’s 1.05% weighting provide some sector diversification within the portfolio.
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Valuation Metrics and Geographic Exposure
Current valuation ratios reflect the premium pricing of the fund’s growth-oriented constituents. The ETF trades at a price-to-earnings multiple of 25.93 and a price-to-book value of 3.84. These metrics raise important questions about whether corporate earnings can continue growing sufficiently to justify such valuations.
Geographic allocation shows overwhelming emphasis on United States equities, which represent 71.86% of the portfolio. This substantially outpaces Japan (5.43%) and the United Kingdom (3.65%), creating significant dependence on the performance of American technology companies.
Competitive Landscape and Performance Metrics
URTH faces increasing competitive pressure regarding expense ratios. With an annual fee of 0.24%, the fund is considerably more expensive than Vanguard’s Total World Stock ETF (VT), which charges just 0.06%. Income-focused investors may find some consolation in the fund’s 30-day SEC yield of 1.26%.
From a performance perspective, the ETF has delivered returns nearly identical to its benchmark index – 18.92% versus 18.67% respectively – demonstrating efficient tracking. The long-term performance remains equally impressive, with gains accumulating to 229.47% over the past decade.
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