ADBE - ACWI: Go With U.S. Funds Instead

2024-06-17 10:39:52 ET

Summary

• The iShares MSCI ACWI ETF owns a portfolio of 2,400 large-cap and mid-cap stocks.
• ACWI has shown strong returns since 2022 but lags behind other funds like iShares MSCI World ETF and the S&P 500 index.
• ACWI's long-term return is inferior to the S&P 500 index due to lower exposure to technology sector and inclusion of emerging markets stocks.

ETF Overview

iShares MSCI ACWI ETF (ACWI) owns a portfolio of about 2,400 large-cap and mid-cap stocks from both emerging and developed markets. ACWI's portfolio has a lower exposure to technology sector than the S&P 500 index. This can be detrimental as technology sector is expected to grow rapidly in the upcoming decade. In addition, its inclusion of emerging markets stocks has dragged its performance in the past as these markets often have higher volatility and risks involved. Together, these may result in ACWI's continual underperformance to the S&P 500 index in the future. Therefore, we do not think it is necessary to own this fund....

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