A New King in the MSCI World: Nvidia’s Meteoric Rise Reshapes Global ETF

A profound leadership change is underway within one of the world's most prominent equity ETFs. The iShares MSCI World ETF (URTH), a flagship fund for global market exposure, is navigating a significant transition as 2025 draws to a close. Despite posting a robust gain of 17.48 percent year-to-date, recent performance has stumbled, with the fund declining by 3.14 percent over the past month. This consolidation phase, viewed by some as a potential entry point, masks a more fundamental and tectonic shift occurring within the portfolio's core holdings.

The primary driver of this recent volatility is the spectacular ascent of Nvidia. The semiconductor behemoth has dethroned the long-standing titans, Apple and Microsoft, to claim the top position within the fund. This is far more than a simple reshuffling of rankings; it serves as a powerful indicator that AI computing has superseded traditional consumer hardware and software as the principal engine of global economic growth.

This transformation is amplified by the overwhelming influence of the "Magnificent Seven" tech stocks, which now dictate the short-term trajectory of the entire fund. The portfolio, while containing approximately 1,300 individual securities, is heavily concentrated in these giants:

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• NVIDIA Corp: ~5.78 % (New Top Holding)
• Apple Inc: ~4.67 %
• Microsoft Corp: ~4.54 %
• Amazon.com Inc: ~2.68 %
• Broadcom Inc: ~1.90 %

The inclusion of Broadcom among the top contenders further solidifies the semiconductor industry's powerful grip on the index's direction.

Concentration Concerns and a Heavy US Bias

For investors seeking genuinely diversified global market access, the current state of the ETF presents a different reality: a substantial, concentrated bet on the US economy. The United States now accounts for 70.3 percent of the fund's weighting, a level of dependency that is historically high. While this reflects the sustained outperformance of the American market compared to Europe and Asia, it simultaneously elevates the fund's exposure to single-region risk.

Sector concentration adds another layer of concern. The technology sector alone now commands nearly one-third of the entire fund's assets. This heavy tilt dramatically increases the ETF's sensitivity to interest rate decisions and the inherently cyclical nature of the semiconductor market. Even after its recent pullback to around $177.30, the ETF continues to trade at a slight premium to its net asset value (NAV). Demand remains steady, but the fund's fundamental risk-reward profile has been irrevocably altered by the dominance of a handful of technology giants.