iShares ACWX ETF Throws Out US Companies And Somehow Still Doubled The S&P 500 Returns

Core Viewpoint - The iShares MSCI ACWI ex U.S. ETF (NASDAQ:ACWX) has experienced significant performance in 2025, benefiting from a resurgence in international stocks despite excluding U.S. companies from its portfolio [1]. Group 1: Fund Overview - ACWX tracks the MSCI ACWI ex USA Index, providing exposure to approximately 2,000 stocks across developed and emerging markets outside the United States, including companies like Tencent, SAP, ASML, and Samsung [2]. - The fund has $7.3 billion in assets, a 0.32% expense ratio, and a 2% dividend yield, with only 12% of its portfolio concentrated in the top 10 holdings, indicating a more balanced risk profile compared to U.S.-focused funds [4][7]. Group 2: Performance Drivers - The performance of international equities has been significantly influenced by the movement of the U.S. dollar; a weaker dollar enhances returns for U.S.-based investors when converting foreign currency returns back to dollars [3]. - In 2025, ACWX's gains were amplified by U.S. dollar weakness, which provided a favorable environment for international stocks [4]. Group 3: Sector Exposure and Diversification - ACWX offers more balanced sector exposure compared to the S&P 500, which has a 34% weight in technology stocks; ACWX diversifies risk across financials, industrials, healthcare, and consumer sectors, leading to different return characteristics [5]. Group 4: Future Considerations - Monitoring the U.S. dollar's stability or strength in 2026 is crucial, as a resurgent dollar could diminish the currency boost for U.S. investors, potentially compressing international equity returns even if foreign stocks perform well locally [6].