URTH Stock Recent News

TUR On A Tear Despite Suffocating Inflation

The iShares MSCI World ETF is a global equity fund with AUM of $3.13 billion recently, in spite of slightly negative net fund flows over the past year. URTH has a heavy weight in favor of the United States (70.88% of the fund) and key sector exposures in Technology, Financial Services, and Healthcare. Despite underperforming the S&P 500 in the past, URTH is nevertheless presently undervalued per my calculations, which may also indicate that broader equity markets are undervalued.

iShares MSCI World ETF is heavily weighted towards US stocks, despite being a global fund. Top holdings include Apple, Microsoft, Amazon, Nvidia, and Alphabet. The ETF is predominantly invested in Information Technology, followed by Financials and Health Care sectors.

Explore the limitations of the MSCI World Index and ETFs like URTH in an era of market concentration and trillion-dollar valuations, prompting a need for general reevaluation. Understand how prioritizing profitability over market capitalization can offer a more resilient and risk-mitigated approach, with a focus on earning power and adaptability. Discover practical steps for constructing a balanced portfolio that combines global earning power and safe bonds, allowing flexibility during crises while aiming for long-term stability.

The iShares MSCI World ETF provides exposure to developed markets, not the entire world, and its share price has been trending higher since October last year. The ETF's performance is largely correlated to the U.S. market due to its significant U.S. asset base, with tech stocks like Apple, Microsoft, and Nvidia driving growth. Despite a Goldilocks-style growth, there are risks to developed markets from tight monetary policies and U.S-China decoupling, and a correction in the ETF's value appears imminent.

iShares MSCI World ETF invests in stocks internationally within a variety of sectors. This ETF recently enhanced its United States-based holdings for their historical performance, but rate hikes could exploit this.

The high weighting of overvalued U.S. stocks, the strong likelihood of profit margin mean reversion, and the weak growth outlook, suggest the URTH is unlikely to keep pace with inflation. The ETF has exposure to international developed markets yet the outperformance of U.S. stocks over the past decade has raised the U.S.' weighting in the ETF to 68%.

Investing in exchange-traded funds carries several risks, some of which are less obvious than others. In any case, investing in ETFs is not a foolproof way to get rich. Using iShares' MSCI World ETF URTH as an example, I will highlight important aspects that should be considered before investing in ETFs.

URTH is supposed to be the broadest ETF out there but it suffers from ultimately being dominated by US exposures and the US geography. As such, its multiple is high considering we're coming into a recession and that supply chains have to some extent been permanently damaged.