The Tech-Heavy Engine Driving a Top Global ETF

The iShares MSCI World ETF (ticker: URTH) delivered a powerful performance in 2025, powered largely by U.S. technology equities and a resilient American economy. This success, however, comes with a notable characteristic: an increasing concentration in a handful of mega-cap stocks, presenting investors with a distinct blend of opportunity and risk that warrants close attention.

Performance Metrics and Valuation Context

URTH, which physically replicates the MSCI World Index, posted an annual return of approximately 22.07% for 2025. The fund is highly liquid, with narrow bid-ask spreads and substantial daily trading activity.

Key fund statistics (as of December 2025):
* Recent Performance: +2.37% (1-month), ~+22.07% (2025), ~13.50% (annualized 5-year)
* Trading & Cost Profile: Average daily volume of ~455,000 shares; a Total Expense Ratio (TER) of 0.24%; typical spread of ~0.03%
* Valuation: Trading at a Price-to-Earnings (P/E) ratio of about 25.2, a premium to historical averages that reflects the robust earnings growth of its major U.S. tech holdings.

A Deeper Look at Holdings and Concentration

While the ETF holds roughly 1,320 individual securities, its performance is dominated by its largest positions. The top ten holdings accounted for a record 27.3% of the fund’s assets at the end of 2025, underscoring the market influence of a few technology giants.

Leading Holdings (Weighting as of late December 2025):
* NVIDIA: 5.45%
* Apple: 4.85%
* Microsoft: 4.12%
* Alphabet (combined Class A & C): ~4.02%
* Amazon: 2.67%
* The top ten are rounded out by Broadcom, Meta, Tesla, and JPMorgan.

NVIDIA, in particular, has acted as a primary return driver, often offsetting weaker trends among European industrial constituents. From a broader perspective, the fund’s allocation is heavily tilted toward the United States (over 70% of assets) and the Information Technology sector (approximately 30%), followed by Financials (~14%) and Industrials (just over 10%).

Strategic Positioning and Index Evolution

The fund’s semi-annual index review by MSCI in November 2025 played a significant role in its current composition. The inclusion of high-growth companies like CoreWeave (AI infrastructure) and Insmed reinforced the index’s shift toward innovation-driven growth themes.

Furthermore, the ETF’s structure means it is primarily a developed markets vehicle, excluding emerging economies. This focus becomes clear when comparing it to other broad global funds.

Should investors sell immediately? Or is it worth buying MSCI World ETF?

Comparative Analysis with ACWI and VT:
| Metric | iShares MSCI World (URTH) | iShares MSCI ACWI | Vanguard Total World (VT) |
| :— | :— | :— | :— |
| Scope | Developed Markets Only | Developed + Emerging | All-Cap Global (Inc. Small Caps) |
| TER | 0.24% | 0.32% | 0.07% |
| AUM | ~$6.7 Billion | ~$19 Billion | ~$50 Billion |
| 2025 Return | +22.07% | +20.02% | ~+18.85% |
| Top 10 Weight | 27.3% | 25.8% | 16.5% |
| Holdings | ~1,320 | ~2,300+ | ~9,800+ |

URTH’s 2025 outperformance of about 200 basis points against ACWI can be attributed to the weaker performance of many emerging markets relative to large U.S. tech. Compared to VT, URTH benefited from its exclusive focus on large-cap developed market stocks, whereas VT’s inclusion of small-caps and emerging markets tempered returns in a large-cap growth environment. Despite these structural differences, all three ETFs remain highly correlated (above 0.95), largely due to the shared heavy weighting of the “Magnificent Seven” cohort.

Forward Outlook: Key Factors for 2026

As we move into the first quarter of 2026, three primary drivers are likely to influence URTH’s trajectory:

1. Full Impact of Index Rebalancing: The November reweighting is now fully in effect. The addition of AI infrastructure plays like CoreWeave signals a move into what some term “AI Phase 2,” shifting focus from pure-play chipmakers toward the underlying data center infrastructure.

2. Valuation Sensitivity in Top Holdings: With a P/E above 25, the ETF carries ambitious valuation expectations. Any earnings disappointments from its five largest positions, which report between late January and early February, could trigger more pronounced pullbacks than in more broadly diversified global ETFs like VT.

3. Currency Effects from Potential Fed Policy: Should anticipated interest rate cuts by the U.S. Federal Reserve materialize in 2026 and weaken the U.S. dollar, the fund’s non-U.S. holdings—such as those from Japan and the Eurozone—could benefit from positive currency translation effects. This would temporarily shift performance leadership away from pure U.S. tech growth toward a greater contribution from international stocks.

From a technical analysis perspective, URTH is currently maintaining support around the $180 level. Immediate resistance lies near prior highs around $188; a sustained break above this level would confirm the broader upward trend remains intact.