The iShares MSCI World ETF’s Growing Reliance on Technology Giants

As January 2026 draws to a close, the iShares MSCI World ETF (URTH) is trading near its record peak. This strength is primarily fueled by a resilient U.S. economy and the ongoing artificial intelligence boom. Consequently, the fund has increasingly become a concentrated vehicle focused on large-cap growth stocks from developed markets, with U.S. technology firms leading the charge.

Performance and Market Context

The fund’s recent performance underscores its momentum. URTH’s share price is approximately $188.56, with a year-to-date gain for 2026 of over 1%. This follows a substantial annual return of 21.28% in 2025. The current market backdrop is characterized by expectations for a “soft landing,” where inflation recedes without a severe downturn in corporate profits. A widening valuation gap between U.S. technology stocks and the rest of the developed world has been a key driver for URTH’s performance entering 2026.

While URTH tracks the MSCI World Index, covering equities from 23 developed countries, U.S. listings overwhelmingly dominate its holdings. The sustained outperformance of major technology and AI-related companies has shifted the portfolio decisively toward growth-oriented equities. Investors in early 2026 continue to favor quality and growth factors over value and small-cap stocks.

Portfolio Concentration and Key Holdings

A significant structural shift has occurred within the ETF: NVIDIA has ascended to become its largest holding, surpassing both Apple and Microsoft. This highlights the central importance of AI infrastructure in the current market cycle.

Top Holdings (as of January 21, 2026):

1. NVIDIA (Information Technology) – 5.31%
2. Apple (Information Technology) – 4.38%
3. Microsoft (Information Technology) – 3.74%
4. Amazon (Consumer Cyclical) – 2.65%
5. Alphabet A (Communication Services) – 2.28%
6. Alphabet C (Communication Services) – 1.91%
7. Broadcom (Information Technology) – 1.76%
8. Meta Platforms (Communication Services) – 1.59%
9. Tesla (Consumer Cyclical) – 1.45%
10. Eli Lilly (Health Care) – 1.04%

JPMorgan Chase holds a weight just above 1%, placing it immediately outside the top ten.

These ten largest positions now account for roughly 26–27% of the fund’s total assets—a notably high concentration for a fund based on a broad world index. In effect, URTH is transforming into a “mega-cap tech plus world” ETF.

Sector allocation further reveals this tilt, with over 27% of the fund invested in Information Technology. Financials constitute about 17%, followed by Health Care at approximately 10%. Geographically, North America represents around 75% of the portfolio, with Europe at 16% and Asia near 7%. This results in a growth-oriented, U.S.-centric profile offering less global diversification than the fund’s name might imply.

Trading, Valuation, and Returns

URTH has successfully converted the strength of its heavyweight holdings into solid returns. Its weekly performance shows a gain of 1.09%, and the three-year annualized return stands at approximately 11.5%. The ETF is highly liquid, with an average daily volume of 430,000 to 500,000 shares. Tight spreads of about 0.03% allow for efficient trade execution.

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

From a valuation perspective, the fund trades at a premium. Its weighted price-to-earnings ratio is 26.10, significantly above historical averages. The shares trade almost exactly at the net asset value of $188.66, with a minimal discount of only -0.09%, indicating stable index tracking without notable structural costs.

Competitive Landscape

URTH competes in the “Global Large-Stock Blend” ETF segment but distinguishes itself through its explicit exclusion of emerging markets.

Selected ETF Comparison:

• iShares MSCI World (URTH)

  • Expense Ratio: 0.24%
  • Focus: Developed markets only
  • Number of Holdings: ~1,322
  • Top 10 Weight: ~26%

• Vanguard Total World Stock (VT)

  • Expense Ratio: 0.07%
  • Focus: Developed and emerging markets, all cap sizes
  • Number of Holdings: Over 9,800
  • Top 10 Weight: ~15%

• iShares MSCI ACWI (ACWI)

  • Expense Ratio: 0.32%
  • Focus: Developed and emerging markets, large & mid caps
  • Number of Holdings: ~2,400
  • Top 10 Weight: ~20%

At 0.24%, URTH is more expensive than VT but deliberately avoids emerging markets. This strategy reduces exposure to emerging market and currency risks while also forgoing their potential opportunities. The methodology leads to a stronger focus on quality and momentum factors, which has been advantageous during the recent tech-driven market cycle. For truly comprehensive global exposure, however, ETFs like VT or ACWI provide broader diversification.

Outlook and Key Factors

Several factors will be crucial for URTH in the weeks leading into February 2026:

• MSCI Index Review: The upcoming quarterly index adjustment in February could further increase technology weightings if major U.S. tech firms again report strong earnings, potentially heightening the ETF’s existing concentration.
• Valuation Levels: With a P/E ratio above 26, significant optimism is already priced in. Any setbacks in AI investment or a cooling in semiconductor demand could disproportionately impact URTH compared to more value-oriented global ETFs.
• Technical Levels: Short-term support is seen near the 50-day moving average around $182. A more critical zone is the breakout area near $180 from late 2025.
• Monetary Policy: Signals from the U.S. Federal Reserve in the first quarter will be pivotal. An accommodative or predictable interest rate policy supports growth-heavy tech stocks, while unexpectedly hawkish tones would likely pressure the growth- and rate-sensitive segments prominent in URTH.