DGT - ACWI: Balanced Exposure To Global Markets Is Mature But Reward Looks Unattractive
2024-03-29 12:47:36 ET
Summary
- Global markets have delivered substantial gains for investors, with interest rate hikes on hold and projections of rate cuts in the US and Europe.
- The iShares MSCI ACWI ETF offers diversification in global markets, but its deep diversification and relative underperformance make it unattractive.
- Comparisons with peers show that the ACWI ETF has higher costs and lower dividend yields, making it less appealing for long-term investors.
Investment Thesis
After robust performance through FY23 and into FY24, global markets led by the U.S. have delivered substantial gains for investors since the markets bottomed in late 2022. Interest rate hikes in most developed countries are on hold as the reserve banks of sovereign nations assess the growth outlook of their countries versus their respective inflation projections. Most recently, the U.S. Federal Reserve announced their projections last week that they continue to expect three rate cuts this year, with the ECB echoing similar sentiments earlier this month ....
ACWI: Balanced Exposure To Global Markets Is Mature, But Reward Looks Unattractive