MSCI World ETF’s Heavy Reliance on US Tech Stocks Raises Diversification Concerns

The iShares MSCI World ETF, while designed to offer broad exposure to developed markets, faces significant headwinds from mounting inflation pressures and ongoing geopolitical instability. Its widely promoted diversification benefits are being scrutinized due to an overwhelming concentration in a handful of American technology behemoths, raising questions about the fund’s true risk distribution.

A deeper examination of the ETF’s portfolio reveals a pronounced geographic concentration that challenges its global diversification premise. The United States constitutes more than 70% of the fund’s total holdings, creating a near-direct correlation with the performance of American equity markets. This substantial overweighting means the ETF’s fortunes are heavily tied to Read more...