The iShares MSCI World ETF (URTH 1.54%) and SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC 1.62%) differ most on ESG screening, sector tilts, and scale, with URTH offering broader liquidity and a longer track record while NZAC targets climate-focused investors at a lower cost.
Both URTH and NZAC give investors access to global equity markets, but they do so with distinct approaches: URTH tracks developed markets without an ESG overlay, while NZAC tracks an index designed to align with the Paris Agreement climate goals, adding an environmental, social, and governance (ESG) filter and including some emerging markets. This comparison highlights key differences in cost, performance, holdings, and risk to help investors weigh which ETF may align better with their goals.
Snapshot (cost & size)
| Metric | URTH | NZAC |
|---|---|---|
| Issuer | iShares | SPDR |
| Expense ratio | 0.24% | 0.12% |
| 1-yr return (as of Dec. 16, 2025) | 13.9% | 12.9% |
| Beta | 1.03 | 1.05 |
| AUM | $6.5 billion | $178.1 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
Performance & risk comparison
| Metric | URTH | NZAC |
|---|---|---|
| Max drawdown (5 y) | (26.06%) | (28.29%) |
| Growth of $1,000 over 5 years | $1,645 | $1,488 |
What's inside
NZAC tracks an ESG-screened index aiming for climate alignment, resulting in a sector tilt toward technology (36%) and a notable allocation to cash and others (16%). It holds 687 stocks, with top positions in Nvidia (NVDA 1.53%), Apple (AAPL 1.93%), and Microsoft (MSFT 0.73%). At 11.1 years old, it is a relatively established option, but its $178.1 million in assets under management (AUM) makes it much smaller than broad global peers. Investors should note the ESG screen, which may exclude high-carbon sectors.
URTH, by contrast, follows a traditional developed-markets index with 1,320 holdings and a similar technology bias (28% of assets), but with more weight to financials and industrials. Its largest positions are also Nvidia, Apple, and Microsoft, reflecting the dominance of U.S. tech giants. With $6.5 billion in AUM, URTH offers greater scale and liquidity, which can reduce trading friction for larger trades.
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What this means for investors
If climate considerations matter in your global investing strategy, NZAC is worth a closer look. Tracking the MSCI ACWI Climate Paris Aligned Index, this fund screens out companies involved in controversial weapons, tobacco, thermal coal, and oil and gas production, while optimizing holdings to reduce greenhouse gas intensity. With a low 0.12% expense ratio, NZAC holds just $175 million in assets but covers both developed and emerging markets with 687 holdings.
Investors looking instead for straightforward exposure to developed markets worldwide should consider URTH. This fund tracks the MSCI World Index and its holdings include around 1,300 large- and mid-cap stocks, with more than 60% allocated to U.S. companies. With a 0.24% expense ratio, its fees are twice as high as NZAC's, but this could be a better fit for those simply looking for traditional market-cap-weighted global diversification across developed economies.
The core difference here is that URTH delivers broad, traditional global market exposure with minimal restrictions, while NZAC adds climate criteria and ESG considerations while keeping a global focus. Both offer world diversification, so the better ETF for you depends on whether climate alignment and sustainable investing principles are important to your portfolio strategy.
Glossary
ETF: Exchange-traded fund, a basket of securities traded on an exchange like a stock.
ESG: Environmental, Social, and Governance; criteria for evaluating a company’s ethical impact and sustainability practices.
Climate screen: An investment filter that selects or excludes companies based on climate-related criteria.
Expense ratio: The annual fee, as a percentage of assets, charged by a fund to cover operating costs.
Liquidity: How easily an asset can be bought or sold in the market without affecting its price.
Drawdown: The percentage decline from a fund’s peak value to its lowest point over a specific period.
Beta: A measure of an investment’s volatility compared to the overall market, often the S&P 500.
AUM: Assets under management; the total market value of assets a fund manages for investors.
Dividend yield: Annual dividends paid by a fund or stock divided by its current price, shown as a percentage.
Sector tilt: When a fund allocates more assets to certain industries or sectors than the broader market.
Paris Agreement: An international treaty aiming to limit global warming by reducing greenhouse gas emissions.
Developed markets: Countries with advanced economies and established financial markets, such as the US, UK, and Japan.
