The iShares MSCI World ETF (URTH) is capitalizing powerfully on the ongoing artificial intelligence revolution, delivering an impressive 19.68% gain since the start of the year. This performance is largely turbocharged by the fund’s substantial allocation to the technology sector, though such a concentrated focus introduces its own set of risks.
A Portfolio Powered by Tech Titans
This ETF provides exposure to over 1,300 stocks across 23 developed markets, with a pronounced tilt toward the United States, which accounts for 73% of the portfolio. A notable feature is the significant concentration in its largest holdings; the top ten positions alone represent 26% of the fund’s total assets.
Leading the pack is NVIDIA with a 5.42% weighting, closely followed by Microsoft (4.56%) and Apple (4.43%). These three technology behemoths have been the primary engines of the fund’s growth in 2025. The dominance of the tech sector is further reinforced by substantial positions in Amazon (2.79%), Meta (2.05%), and the combined share classes of Alphabet (2.92%). Broadcom, with a 1.70% allocation, underscores the fund’s strategic bet on the semiconductor infrastructure that underpins the AI boom. JPMorgan Chase is the sole financial sector representative among the top holdings, with a 1.07% weighting.
Performance Metrics and Fund Characteristics
The fund’s performance record is compelling, showing a 17.46% return over the past twelve months and an annualized three-year gain of 23.98%. Its efficient management is evidenced by a minimal tracking error of just 1.32%.
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With an expense ratio of 0.24%, the fund finds itself in the mid-range for cost, facing competition from more economical alternatives. Investors benefit from strong liquidity, as the ETF trades an average of 582,675 shares daily.
Assessing the Concentration Risk
The fund’s heavy reliance on U.S. technology stocks, however, presents a potential vulnerability. Its fortunes are closely tied to a narrow segment of the market, making it susceptible to a sector rotation away from tech or any downturn in the current AI-driven market enthusiasm. Regulatory challenges targeting major tech firms could also negatively impact performance.
While the portfolio does include European equities such as ASML, Nestlé, and SAP—collectively contributing 8.25%—this offers only limited diversification. Japanese holdings add another 5.48%, providing a modest buffer against volatility originating from the U.S. market, but the ETF’s trajectory remains decisively linked to the performance of American technology giants.
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