I’m sure you would have come across an advice that goes something along the lines of, ‘you can get an exposure to listed companies around the world when you invest in the iShares MSCI World ETF (NYSE ARCA: URTH).’

The first thing on your mind the first time you hear about this suggestion will probably be, ‘what is this ETF is all about?’ – this was the exact question I had in my mind when I was first introduced to the ETF.

I’ve done some researches to learn about it, and in this post, you will find the essentials you need to know about the iShares MSCI World ETF prior to making any investment decisions in it.

Let’s get started:

What does the iShares MSCI World ETF Track?

The iShares MSCI World ETF (NYSE ARCA: URTH) tracks the performance of the MSCI All World Index – at the time of writing, the index comprises of 1,479 large- and mid-cap companies across 23 developed markets countries from North America, Europe, Asia Pacific, and in the Middle East:

  1. Australia
  2. Austria
  3. Belgium
  4. Canada
  5. Denmark
  6. Finland
  7. France
  8. Germany
  9. Hong Kong
  10. Ireland
  11. Israel
  12. Italy
  13. Japan
  14. Netherlands
  15. New Zealand
  16. Norway
  17. Portugal
  18. Singapore
  19. Spain
  20. Sweden
  21. Switzerland
  22. United Kingdom
  23. United States

In terms of countries with the biggest weightage in the Index, as at 29 February 2024, it is as follows (with the weightage [expressed in percentage terms] in brackets): United States (70.88%), Japan (6.17%), United Kingdom (3.75%), France (3.03%), Canada (3.03%), Remaining 17 Countries (13.02%). That said, depending on the performance of the companies listed in the United States, the performance of the Index will be directly impacted (it is also with that in mind that some investors may choose to just invest in either the S&P 500 ETF (NYSE ARCA: SPY), or the NASDAQ (NYSE ARCA: QQQ).

Since Singapore is one of the countries that the index have an exposure to, I am interested in knowing which companies are included in it. They are (listed according to their weightage in the Index): DBS, OCBC, UOB, SEA Limited (the company was founded in Singapore but listed on the New York Stock Exchange), SingTel, CapitaLand Integrated Commercial Trust, Keppel Corporation, CapitaLand Investment, CapitaLand Ascendas REIT, SGX, Wilmar International, SIA, ST Engineering, Mapletree Logistics Trust, Grab Holdings (the company’s headquarters is in Singapore, but it is listed on the NASDAQ Exchange), Venture Corporation, Genting Singapore, Mapletree Pan Asia Commercial Trust, City Developments, United Overseas Land. While it seems like a lengthy list, but each of them have just a very small weightage in the index (less than 0.1%), meaning any positive or negative movements in the companies’ share price will have no impact on the the ETF.

In Which Sectors are Companies in the iShares MSCI World ETF Belong to?

The weightage of each of the 11 sectors in the iShares MSCI World ETF is as follows:

  • Information Technology (23.82%)
  • Financials (15.20%)
  • Health Care (12.15%)
  • Industrials (11.11%)
  • Consumer Discretionary (10.66%)
  • Communication (7.30%)
  • Consumer Staples (6.57%)
  • Energy (4.30%)
  • Materials (3.84%)
  • Utilities (2.39%)
  • Real Estate (2.30%)

The remaining 0.34% is in cash and/or derivatives.

Looking at the above, 5 industries (in Information Technology, Financials, Health Care, Industrials, and Consumer Discretionary) collectively contributed a 72.94% weightage towards the ETF.

What are the Top 10 Companies with the Heaviest Weightage in the iShares MSCI World ETF?

At the time of writing, the top 10 companies with the heaviest weightage are all listed either on the New York Stock Exchange (or NYSE for short), or on the NASDAQ Exchange.

Collectively, these 10 companies have a weightage of about 21.85%, and the sectors they are in are as follows: 4 in Information Technology (with a weightage of 12.66%), 1 in Consumer Discretionary (with a weightage of 2.50%), 2 in Communications (with a weightage of 4.08%), 1 in Health Care (0.93%), and 2 in Financials (with a weightage of 1.68%).

In this section, you will find what each of these companies are (I’m sure you’ll be able to recognise more than half of the companies in this list), what they do, along with their financial performances over the last 5 years:

1. Microsoft Corporation (NASDAQ: MSFT) – Information Technology – 4.47% Weightage

Founded in 1975, Microsoft Corporation is in the business of developing and supporting software, services, devices, and solutions that deliver new value for its customers, and at the same time, helping people and businesses realise their full potential.

Most of us are familiar with the company’s products and services, including the Microsoft Windows operating system, its Microsoft Office suite of products, professional social networking platform LinkedIn (which the company acquired in December 2016), its gaming console Xbox, along with its Surface family of computing products.

Let us have a look at Microsoft Corporation’s total revenue and net income (or net profit) growth over the last 5 years (the company has a financial year end every 30 June):

Microsoft Corporation’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Microsoft Corporation’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Total revenue saw a double digit percentage growth every single year except for 2023 (where it grew at 6.9%) – over a 5-year period, it rose from US$125.50 billion in 2019 to US$211.92 billion in 2023, and recording a compound annual growth rate (or CAGR for short) of 11.0%.

Net income, however, saw year-on-year improvements in 4 out of 5 years (the only year which its net income declined was in 2023, by 0.52%, due to changes in tax benefits and expenses related to severance, hardware-related impairments, and lease consolidations). However, over a 5-year period, its net income went up from US$39.24 billion in 2019 to US$72.36 billion in 2023, and recording a CAGR of 13.0%.

2. Apple Inc (NASDAQ: AAPL) – Information Technology – 3.97% Weightage

Apple Inc is in the business of designing, manufacturing, and marketing smartphones (iPhone), personal computers (Mac), tablets (iPad), wearables and accessories (including Apple Watch, Apple TV, along with Apple-branded and 3rd party accessories), as well as selling a variety of related services (including AppleCare, Cloud Services, and digital content through its App Store, as well as payment service Apple Pay).

With a financial year end on the last Saturday of September, the following is Apple Inc.’s total revenue and net income recorded over the last 5 years:

Apple Inc’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Apple Inc’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Apple Inc’s total revenue saw a stable growth between 2019 and 2022, before suffering from a 2.8% dip in 2023 (due to a 6% decline in product sales, partly offset by a 9% improvement in services sales). Despite of that, its total revenue still managed to grow from US$259.97 billion in 2019 to US$383.29 billion in 2023 – and this equates to a CAGR of 8.1%.

Its net income also had a similar performance (compared to its total revenue), where, apart from a 2.8% dip in 2023, the remaining years saw year-on-year (y-o-y) growths. Over a 5-year period, Apple Inc’s net income went up from US$55.26 billion in 2019 to US$97.0 billion in 2023, and recording a CAGR of 11.9%.

3. Nvidia Corporation (NASDAQ: NVDA) – Information Technology – 3.32% Weightage

Unless you have been living under a rock, you should have heard about the company called Nvidia Corporation – the company benefited immensely from the proliferation of artificial intelligence due to a very strong demand for its GPUs (where they are adopted in data centres).

The company reports its business results in 2 segments:

(i) Compute & Networking Segment – it includes NVIDIA’s data centre platforms that help in processing vast amounts of data quickly, making it crucial for cloud computing and artificial intelligence. It also contains networking platforms that ensure data moves swiftly and efficiently across systems, which is essential for high-speed internet and cloud services. Additionally, this segment covers NVIDIA’s efforts in the automotive industry with its DRIVE platform for self-driving cars, robotics with its Jetson platform, and software solutions for AI applications in various industries.

(ii) Graphics Segment – it includes GeForce GPUs that power high-end gaming experiences on PCs, the GeForce NOW streaming service that lets you play games on almost any device without needing a powerful computer, and Quadro/NVIDIA RTX GPUs that professionals use for creating stunning visual effects in movies and designing complex industrial models. Additionally, this segment works on technology for virtual GPU services, infotainment systems for cars, and Omniverse Enterprise software, which is like a creative studio for building and exploring virtual worlds and metaverse applications.

The following is Nvidia Corporation’s total revenue and net income recorded over the last 5 financial years – it has a financial year ending on the last Sunday of January:

Nvidia Corporation’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Nvidia Corporation’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Nvidia Corporation’s total revenue grew every single year – where it went up from US$10.92 billion in 2019 to US$60.92 billion in 2023 – recording a very impressive CAGR of 41.0% (this is attributed to a 125.9% jump in its total revenue in 2023, as revenue from its data centre services soared by 409% from a year ago).

Net income, however, saw a 55% decline in 2022, due to a record US$1.36 billion charge in relation to the termination of the share purchase agreement for the acquisition of Arm Limited from Softbank. Apart from that, its net income saw growths every year, where it climbed from US$2.80 billion in 2019 to US$29.76 billion in 2023, and recording a CAGR of a very impressive 60.4%.

4. Amazon.com Inc (NASDAQ: AMZN) – Consumer Discretionary – 2.50% Weightage

Talk about Amazon.com Inc, most will immediately recall its namesake e-commerce platform, where it has hundreds of millions of products across a swath of categories made available. It also manufacture and sell electronic devices (in Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero), as well as developing and producing media content (and making it available through Amazon Prime Video).

On top of that, they also offer subscription services such as Amazon Prime (a membership program that offers fast and free shipping on tens of millions of items, access to award-winning movies and series, along with other benefits), and its Amazon Web Services (comprising of a range of cloud services such as computing power, storage options, and networking capabilities).

The following is Amazon.com Inc’s total revenue and net income over the last 5 years (between 2019 and 2023) – the company has a financial year end every 31 December:

Amazon.com Inc's Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Amazon.com Inc’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

The tech company’s total revenue saw a steady growth over the last 5 years, rising from US$280.52 billion in 2019 to US$574.79 billion in 2023 – a CAGR of 15.4%.

Its net income fell into a net loss position in 2022 (at -US$2.72 billion, as it reported a $7.6 billion loss from its stake in Rivian Automotive, as its share price plunged by nearly 75% following its listing). Apart from that, the remaining 4 years saw y-o-y improvement. Throughout the entire 5-year period, its net income climbed from US$11.59 billion in 2019 to US$30.43 billion in 2023 – recording a CAGR of 21.3%.

5. Alphabet Inc Class A & C (NASDAQ: GOOGL, NASDAQ: GOOG) – Communication – 2.40% Weightage

Before I go on and talk about Alphabet Inc’s business, let me first share on the main difference between Class A (NASDAQ:GOOGL) and Class C (NASDAQ:GOOG) – the former has voting rights, while the latter does not.

Alphabet Inc is a collection of businesses – the largest of which is Google. The company reports its its Google business under 2 segments: Google Services (where core products and platforms include ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Pay, Search, and YouTube) and Google Cloud, and all other non-Google businesses collectively under ‘Other Bets’ (which includes businesses that are in the various stages of development, ranging from those in the R&D phase to those that are in the beginning of commercialisation).

The company has a financial year end every 31 December, and the following is its total revenue and net income recorded over the last 5 years:

Alphabet Inc's Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Alphabet Inc’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Total revenue of Alphabet Inc saw y-o-y growth every single year over the last 5 years (where it rose from US$161.40 billion in 2019 to US$307.16 billion in 2023), and recording a CAGR of 13.7%.

Net income, on the other hand, saw y-o-y improvement in 4 out of 5 years (the only year which saw its net income decline was in 2022, by 21%, mainly due to a significant downturn in its investment in Rivian Automotive). That said, its net income still manage to grow from US$34.34 billion in 2019 to US$73.80 billion in 2023 – a CAGR of 16.5% over a 5-year period.

6. Meta Platforms Inc (NASDAQ: META) – Communication – 1.68% Weightage

Facebook, Instagram, Messenger, WhatsApp – these social networking and messaging platforms are owned by NASDAQ-listed Meta Platforms Inc. The company generates revenue from Facebook, Instagram, and Messenger platforms through advertisements that appear in multiple places, as well as on third-party applications and websites.

On top of that, the company also generates revenue from its ‘Reality Labs’ business segment where it retails consumer hardware products (including Meta Quest Devices), along with software and content (through its Meta Quest Store).

Meta Platform Inc's Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Meta Platform Inc’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Apart from 2022, where the company’s total revenue and net income fell by 1.1% and 41.1% respectively (due to increased costs and expenses, as well as significant charges related to the company’s restructuring efforts), the remaining 4 years saw y-o-y growth in the 2 financial metrics.

Total revenue grew from US$70.70 billion in 2019 to US$134.90 billion in 2023 – recording a CAGR of 13.8%, while net income climbed from US$18.49 billion to US$39.10 billion in the same time period – recording a CAGR of 16.2%.

7. Eli Lilly and Company (NYSE: LLY) – Health Care – 0.93% Weightage

Incorporated since 1901 in Indiana, Eli Lilly and Company is in the business of discovering, developing, manufacturing, and marketing products in a single business segment – human pharmaceutical products, where they are produced through facilities in the US (including Puerto Rico, Europe, and Asia), and sold in approximately 105 countries currently.

The company has a financial year end every 31 December, and the following is its total revenue and net income recorded over the last 5 years (between 2019 and 2023):

Eli Lilly and Company's Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Eli Lilly and Company’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Total revenue saw a stable growth every single year over the last 5 years – where it went up from US$22.32 billion in 2019 to US$34.12 billion in 2023, recording a CAGR of 8.9%.

Its net income however saw y-o-y declines in 2 out of the 5 years I have looked at (by 9.9% in 2021, as well as by -16.1% in 2023). Despite of that, over a 5-year period, its net income still manage to climb from US$4.64 billion in 2019 to US$5.24 billion in 2023 – and this translates to a CAGR of 2.5%.

8. Broadcom Inc (NASDAQ: AVGO) – Information Technology – 0.90% Weightage

Broadcom Inc is a leading global tech company that develops semiconductor and infrastructure software solutions.

The company focuses on creating high-performance products for specific markets like networking, broadband, telecommunications, and data storage. Their software solutions help businesses manage and secure applications across various environments, making them essential for many Fortune 500 companies and government agencies. Additionally, its acquisition of VMware (completed in November 2023) enhances its offerings in hybrid-cloud solutions, supporting customers in running critical workloads securely across different environments.

With a financial year ending on the last Sunday of October, the following is Broadcom Inc’s total revenue and net income reported over the last 5 years:

Broadcom Inc's Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Broadcom Inc’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Both its total revenue and net income saw stable improvements every single year over the last 5 years – with the former climbing from US$22.60 billion in 2019 to US$35.82 billion in 2023, and recording a CAGR of 9.6%, and the latter improving from US$2.72 billion to US$14.08 billion in the same time period, and recording a CAGR of a very impressive 38.9%.

9. JPMorgan Chase & Co (NYSE: JPM) – Financials – 0.85% Weightage

With $3.9 trillion in assets, and $327.9 billion in shareholders’ equity as at 31 December 2023, JPMorgan Chase & Co is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. The firm is based in the US, with operations around the world.

The following is the financial institutions financial performance (in terms of its total revenue and net income) between 2019 and 2023 – it has a financial year end every 31 December:

JPMorgan Chase & Co's Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

JPMorgan Chase & Co’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

JPMorgan & Chase Co’s total revenue saw y-o-y growth in 4 out of 5 years (the only year which the financial institution’s total revenue fell was in 2020, due to the impact caused by the Covid-19 pandemic). Over a 5-year period, its total revenue climbed from US$141.33 billion in 2019 to US$239.32 billion in 2023, and recording a CAGR of 11.1%.

Net income of the financial institution fell in 2 out of 5 years (in 2020, primarily due to the impact of the Covid-19 pandemic and the bank increased its provisions for credit losses, as well as in 2022). Despite of that, its net income still managed to record improvements from US$36.23 billion in 2019 to US$49.26 billion in 2023 – this translates to a CAGR of 6.3%.

10. Berkshire Hathaway Inc. Class B (NYSE: BRK.B) – Financials – 0.83% Weightage

Berkshire Hathaway Inc. is synonymous with the Oracle of Omaha, Warren Buffett – for he is the Chairperson of the company. I know of many friends who invested in the company because of Mr Buffett himself. When I asked if they know what is the company’s business, I got a blank stare in return.

So for those of you who do not know what the company does, it is a holding company owning subsidiaries engaged in numerous diverse business activities – some of the key ones include insurance businesses conducted on both a primary basis and on a reinsurance basis, a freight rail transportation business, and a group of utility and energy generation and distribution businesses.

The following is the company’s total revenue and net income reported between 2019 and 2023 (a period of 5 years). It has a financial year end every 31 December:

Berkshire Hathaway Inc's Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Berkshire Hathaway Inc’s Total Revenue and Net Profit between 2019 and 2023 – Image Source: TradingView.com

Total revenue of the company fell by 3.6% in 2020 primarily due to the impact of the Covid-19 pandemic which led to reduced economic activity. Apart from that, its total revenue saw improvements in the remaining 4 years. Over a 5-year period, it went up from US$254.62 billion in 2019 to US$364.48 billion in 2023, and recording a CAGR of 7.4%.

Net income fell in 2 out of 5 years I have looked at (by 47.8% in 2020 due to the Covid-19 pandemic, as well as in 2022, where it fell into a net loss of -US$22.76 billion, due to a loss in investment value in its stock portfolio). Over a 5-year period, its net income went up from US$81.42 billion in 2019 to US$96.22 billion in 2023 – a CAGR of 3.4%.

What are the Fees of the iShares MSCI World ETF?

The only fee of the ETF is management fee, at 0.24% – which is considered quite low (as most ETFs have a management fee of between 0.50% and 0.60%).

Will I Receive any Dividend Payouts if I were to Invest in the ETF?

As an investor of the iShare MSCI World ETF, you will receive dividends on a half-yearly basis – once in June, and once in December. However, do take note that if you are a Singaporean investing in the ETF, all payouts are subjected to a 30% withholding tax (meaning the payout you eventually receive will be 30% lower).

The following table is the ETF’s dividend payout over the last 5 years (between 2019 and 2023):

20192020202120222023
Dividend
Per Share
(US$/share)
$2.13$1.71$1.95$1.83$2.26

iShares MSCI World ETF's Dividend Payout between 2019 and 2023

The ETF’s dividend payout over the years have fluctuated – that’s something for income investors (individuals who builds his/her investment portfolio focusing on a stable stream of dividend payouts on a regular basis) to take note of.

How has the Unit Price of the iShares MSCI World ETF Moved over the Years?

The following is the unit price movement of the iShare MSCI World ETF on a weekly timeframe:

Price Movement of the iShares MSCI World ETF (NYSE ARCA: URTH) on a Weekly Timeframe

Price Movement of the iShares MSCI World ETF (NYSE ARCA: URTH) on a Weekly Timeframe

Since bottoming at US$66.38 in March 2020 (when the pandemic started), it is now up by 121% to US$146.73 as at market close last Friday (17 May 2024).

Its current price is just a whisker below its all-time high price of US$147.04 which it touched during the week.

From a technical analysis point-of-view, as the 50-day simple moving average (blue line) is above the 200-day simple moving average (orange line), it is well in an uptrend.

How Can You Invest in the ETF?

You can invest in the iShare MSCI World ETF just like how you invest in any US companies – where the minimum lot size is just 1 unit.

Looking at its current unit price (at US$146.73), your minimum investment for this ETF in Singapore Dollar-term is about S$197.43 (based on the exchange rate of US$1 to S$1.35 at the time of writing), plus brokerage fees.

Closing Thoughts

While it seems like you are getting an investment in companies in 23 countries in North America, Europe, Asia Pacific, as well as in the Middle East, but because the United States have a close to 71% weightage in the ETF, any positive or negative movements in the US market will have a direct influence in how the iShare MSCI World ETF moves. That said, some investors may prefer to just invest in the US indexes directly, where the expense ratios are lower – for the SPY, it is at 0.09%, and for QQQ, it is at 0.20% – both lower than the iShare MSCI World ETF’s expense ratio of 0.24%.

Diving into the top 10 companies with the heaviest weightage on the ETF, they are listed either on the New York Stock Exchange, or on the NASDAQ Exchange – collectively, they have a weightage of about 21.85%. In terms of each of the company’s performance over the last 5 years, they are very stable (I’m sure you will agree with me on that). Also, most of the companies in this list are immediately recognisable, as they are “household names” (for those who are hearing about these companies for the first time, I hope after reading about their businesses and key financial performances, you have a better understanding of them).

Looking at its dividend payout, it has fluctuated over the years, so this is something income investors will need to be mindful of when making any investment decisions on the ETF.

Finally, when it comes to its unit price movement, it is in a very strong uptrend – where it is benefitting from the bullish movements in the US market (since the US market has a 71% weightage in the ETF).

With that, I have come to my sharing of the iShare MSCI World ETF. I hope the contents presented in this post have given you a much better understanding of the ETF. As with all my other posts, do take note that everything you have just read is purely for educational purposes only, and you should do your own due diligence before you make any investment decisions.

Disclaimer: At the time of writing, I do not have any investments in the iShares MSCI World ETF.

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