Go Big or Go Green: Should You Buy SPGM's Broad Diversification or NZAC's Climate Focus?

Core Viewpoint - The SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) and SPDR Portfolio MSCI Global Stock Market ETF (SPGM) provide global equity exposure but cater to different investor priorities, with NZAC focusing on climate-related ESG screening and SPGM offering broad, low-cost access to the global stock market [2][3]. Cost and Size Comparison - NZAC has an expense ratio of 0.12% while SPGM has a lower expense ratio of 0.09% [4][5]. - As of the latest data, NZAC has assets under management (AUM) of $177.8 million, whereas SPGM has a significantly larger AUM of $1.3 billion [4][5]. Performance Metrics - The one-year return for NZAC is 13.51%, while SPGM has a higher return of 16.36% [4][15]. - Over five years, the maximum drawdown for NZAC is -18.01%, compared to -23.68% for SPGM [8]. Holdings and Sector Exposure - SPGM includes approximately 2,890 holdings with a sector distribution of 26% technology, 17% financial services, and 12% industrials, featuring top positions in Nvidia, Apple, and Microsoft [9]. - NZAC has 687 holdings with a similar sector distribution: 31% technology, 17% financial services, and 11% industrials, also featuring Nvidia, Apple, and Microsoft as top holdings [10][14]. Investment Strategy - SPGM serves as a broad-market tracker without thematic tilts, appealing to investors seeking comprehensive market exposure [13]. - NZAC targets companies that meet environmental benchmarks aligned with the Paris Agreement, appealing to investors focused on sustainability and societal impact [14][16].