The iShares Core MSCI World UCITS ETF is based on a passive investment strategy designed to replicate the performance of the MSCI World Index, an index of nearly 1,400 listed companies in 23 developed markets. Its mission: to capture the dynamics of large and mid-cap international equities, with weighting based on companies' free-float market capitalization.

Launched in 2012, this ETF has a total expense ratio (TER) of 0.24%, it falls into the category of low-cost ETFs, a significant advantage for long-term investors.

An optimized, fairly diversified portfolio

Unlike full physical replication, which would require buying all the stocks in the index, this ETF uses optimized replication. This approach consists of selecting a strategic sample of stocks to reduce transaction costs while minimizing the tracking error.

The ETF's top 10 holdings include US technology giants such as:

Apple (5.04%) Nvidia (4.63%) Microsoft (3.97%) Amazon (2.90%) Meta (2.08%)

These five stocks alone account for almost 20% of the ETF, demonstrating the impact of technology dominance on developed markets. However, thanks to its diversified portfolio of 1,398 stocks, the ETF retains a broad exposure that mitigates the risk specific to a single company.

The USA accounts for around 73.2% of the portfolio (February 2025). This overweight is explained by the size and dominance of US companies in the MSCI World index, particularly in the technology sector. Behind the US, the main exposures are to Japan (5.2%), the UK (3.5%), Canada (3%), France (2.7%), Switzerland (2.3%) and Germany (2.3%).

Robust performance over the long term

Since its launch, the ETF has posted an annualized performance of 11.2%, testifying to the strength of the MSCI World over the long term. Recent performances illustrate its cyclical behavior in the face of market fluctuations:

2023: +23.93% 2022: -17.95% 2021: +22.01% 2020: +16.09% The year 2022 was marked by a sharp downturn due to volatile equity markets, but the recovery seen in 2023 demonstrates the resilience of developed market stocks.

What are the risks associated with this ETF?

Despite being a well-diversified product, the ETF is not risk-free. Major volatility factors include:

Market risk: no need to draw a picture. Concentration risk: large technology stocks account for a significant proportion of the portfolio. In the event of a sector correction, the impact can be significant. Currency risk: denominated in USD, the ETF exposes euro investors to fluctuations in the dollar.

Although some investors are looking for stricter environmental, social and governance (ESG) criteria, this ETF does not follow an advanced ESG approach.

Why choose this ETF? ?

Advantages

  • Broad diversification across developed markets
  • Low fees, maximizing long-term profitability
  • Good liquidity 
  • Solid performance track record over 13 years
  • Efficient passive management minimizing human intervention and associated costs

Weaknesses

  • Heavy weighting of technology stocks (potentially vulnerable in the event of a sector crisis)
  • Lack of strict ESG screening

One of the basics of passive management

The iShares MSCI World ETF is one of the ETFs most present in the portfolios of investors around the world. This makes sense, as it allows you to ride the secular rise of global markets, at relatively low cost. On the other hand, there's no big thrill in sight, even if its track record speaks in its favor.