The iShares MSCI World ETF (URTH) is delivering standout performance in 2025, capitalizing on a powerful rally across developed equity markets. This surge is being fueled by two distinct economic engines: a global acceleration in artificial intelligence investment and targeted fiscal stimulus, particularly within Europe.
Performance and Primary Drivers
Since the start of the year, the fund has generated a substantial return of 21.73%. This strength underscores the resilience of established markets. A key catalyst has been the rapid expansion of the AI investment cycle, which has propelled worldwide infrastructure deals to surpass a staggering $500 billion in value. Concurrently, European economies are receiving a boost from increased government expenditure, with Germany’s defense and infrastructure initiatives serving as prominent examples.
The ETF tracks the MSCI World Index, providing exposure to approximately 85% of the investable market capitalization across developed nations. Its market-capitalization weighting methodology has proven advantageous during this technology-led advance, as it automatically allocates greater importance to the largest and most liquid companies.
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Geographic and Portfolio Composition
A deep dive into the fund’s holdings reveals a pronounced geographic concentration that mirrors current market leadership. The United States commands a dominant 70.43% weighting within the portfolio, a direct reflection of the outperformance of US equities relative to other regions. Japan occupies a distant second place at 5.47%, followed by the United Kingdom at 3.68%.
Despite this heavy US tilt, the fund maintains considerable breadth. It holds 1,320 positions across 23 developed countries and has assets under management totaling $6.63 billion. An analysis of its largest holdings indicates a relatively diversified approach among its biggest bets: the top ten positions account for 27.86% of the total assets. This figure is notably lower than the category average of 46.35%, suggesting better diversification within the fund’s heavyweight constituents.
For investors, the ETF offers a streamlined vehicle to participate in global economic trends. However, its trajectory remains inextricably linked to the continued momentum of the US technology sector, which currently sets the pace for the entire fund.
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