URTH vs. NZAC: Similar Results But Different Fees

Core Insights - The article compares two global ETFs: SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) and iShares MSCI World ETF (URTH), highlighting their differences in cost, yield, and investment focus [1][2] Cost and Size Comparison - NZAC has a lower expense ratio of 0.12% compared to URTH's 0.24%, making it more cost-effective for investors [3][4] - As of December 2, 2025, NZAC has a 1-year return of 12.5% and a dividend yield of 1.9%, while URTH has a 1-year return of 15.0% and a dividend yield of 1.3% [3] - NZAC's assets under management (AUM) are $177.9 million, significantly smaller than URTH's AUM of $6.5 billion [3] Performance and Risk Analysis - Over a five-year period, NZAC experienced a maximum drawdown of -29.6%, while URTH had a drawdown of -26.9% [5] - An investment of $1,000 would have grown to $1,522 in NZAC and $1,682 in URTH over five years, indicating URTH's superior performance despite its higher fees [5] Fund Composition - URTH consists of 1,322 developed-market stocks, with significant holdings in technology (27%), financial services (16%), and industrials (11%), including major companies like Nvidia, Apple, and Microsoft [6] - NZAC holds 687 stocks, covering both developed and emerging markets, with a heavier focus on technology (31%) and a climate-focused, ESG-screened approach [7] Investment Focus - The primary distinction between the two funds lies in their investment goals: NZAC targets investors looking to mitigate climate risk, while URTH provides broader exposure to international stocks without sustainability considerations [9][10] - The difference in fees is emphasized as a critical factor for investors, as similar performance can lead to significantly different long-term returns due to the expense ratio disparity [11]