A Shift in Leadership: NVIDIA Tops Holdings in iShares MSCI World ETF

The iShares MSCI World ETF (URTH) has commenced 2026 on stable footing following a robust performance last year. While its year-to-date return stands at 1.50% (as of January 23), the more significant development is a notable change in the fund's top holdings. NVIDIA has now overtaken both Apple and Microsoft to become the ETF's largest single position, accounting for over 5% of the portfolio. This shift underscores the fund's growing reliance on a narrow cluster of major technology stocks.

In 2025, URTH delivered a substantial gain of 21.36%. However, its year-to-date performance for 2026, at +1.50%, slightly trails some broader global indices. The fund's share price was approximately $189.05 as of the latest data. Over a three-year period, it has generated an annualized return of about 21.29%, demonstrating strong long-term results despite recent concentration concerns.

Trading conditions for the ETF remain favorable. It exhibits solid daily volume with narrow bid-ask spreads and trades close to its net asset value, showing a minimal discount of roughly 0.1%, which indicates efficient market pricing.

Examining Portfolio Concentration

With assets under management totaling $6.95 billion (as of January 22), URTH tracks the MSCI World Index, which focuses on developed markets. In practice, however, its allocation is heavily tilted toward U.S. technology equities. The top ten holdings collectively represent about 26.2% of the fund's assets, highlighting a significant concentration.

Key Concentration Metrics:
* Largest Holding: NVIDIA with a 5.32% weighting.
* Top Three Holdings (NVIDIA, Apple, Microsoft): Combined weight of 13.45%.
* Information Technology Sector Allocation: Nearly 28%.
* U.S. Exposure: Roughly 72% of the total portfolio.

Top Ten Holdings by Weight:
1. NVIDIA (5.32%)
2. Apple (4.36%)
3. Microsoft (3.77%)
4. Amazon (2.66%)
5. Alphabet Inc. Class A (2.28%)
6. Alphabet Inc. Class C (1.91%)
7. Broadcom (1.73%)
8. Meta Platforms (1.66%)
9. Tesla (1.50%)
10. Eli Lilly (1.04%)

This composition means URTH currently behaves less like a broadly diversified global ETF and more like a targeted play on the fortunes of U.S. mega-cap companies, with Europe and Asia contributing far less to its returns.

Competitive Landscape: URTH vs. Broader Alternatives

A comparison with two globally oriented peers reveals URTH's specific niche. In 2025, both the iShares MSCI ACWI ETF (ACWI) and the Vanguard Total World Stock ETF (VT) posted returns of approximately 22.43%, outperforming URTH's 21.36%. This gap was primarily driven by a powerful rally in emerging markets, which surged 33.57% and are not included in URTH's benchmark.

Selected Comparison Data (as of January 23, 2026):

The takeaway is clear: investors in URTH pay a relatively high fee of 0.24% for the explicit exclusion of emerging markets. While this was a disadvantage in 2025, the fund offers a defined strategy for those seeking exposure solely to developed markets without the volatility associated with China or other emerging economies. VT sets the benchmark for low cost with its 0.06% expense ratio.

Forward Outlook and Key Considerations

1. Index Rebalance in February
The next scheduled index review in February 2026 is a crucial event. Given the substantial market capitalization growth of AI-focused hardware companies like NVIDIA and Broadcom compared to traditional industrial firms, a further increase in technology sector weighting is anticipated. This could amplify the fund's already significant tech concentration.

2. New Hedging Instruments
A structurally important development for institutional investors is the planned launch of options on the MSCI World Index at the NYSE in early 2026. Additional derivative products based on the index will facilitate hedging strategies and may indirectly lead to greater liquidity and tighter spreads for the ETF itself.

3. Valuation and Technical Levels
From a technical perspective, URTH is currently maintaining support around the $185 level, with the $190 zone acting as the next key resistance. Valuations appear demanding, with the underlying index trading at a price-to-earnings ratio of approximately 24, suggesting significant optimism is already priced into the market.

In the near term, the substantial combined weight of NVIDIA, Apple, and Microsoft increases the ETF's sensitivity to these companies' quarterly earnings reports. Disappointing Q1 2026 results from any of these giants could trigger disproportionate declines compared to less concentrated or equal-weighted investment approaches.

In summary, the iShares MSCI World ETF remains a core building block for developed market equity exposure, but one with an unmistakable and growing emphasis on U.S. technology. Its trajectory will likely be shaped by the upcoming index rebalancing, the earnings season for major tech constituents, and the sustainability of current valuation levels.