Economic Overview - The S&P 500 has traded sideways this year, while the iShares MSCI ACWI ex US ETF has advanced about 10%, indicating a significant divergence in performance between U.S. stocks and global markets [1] - High valuations and concerns regarding President Trump's policies have led to a decrease in investor interest in U.S. stocks [1] Tariff Policy Changes - President Trump has replaced the now-illegal IEEPA tariffs with similar Section 122 tariffs, which were initially set at 10% and later increased to 15% [5][6] - The Supreme Court ruled against the IEEPA tariffs, stating that the president exceeded his authority, prompting the quick implementation of Section 122 tariffs [6] Economic Impact of Tariffs - Studies from various institutions indicate that U.S. businesses and consumers have borne approximately 90% of the costs associated with President Trump's tariffs [8] - The Congressional Budget Office (CBO) suggests that the tariffs have resulted in a lower GDP than would have occurred without them, as tariff revenue diverts funds that could have supported economic growth [9] Employment and Growth Data - In 2025, the U.S. economy added only 181,000 jobs, marking the lowest increase since 2009, excluding the pandemic [10] - Economic growth was recorded at just 2.2% in 2025, the slowest rate in a decade, excluding pandemic effects [10] - PCE inflation reached 2.9% in December 2025, the highest level since March 2024, indicating rising price pressures [10]

Core Insights - Early 2026 is characterized as a stock-picker's market, with investors favoring countries experiencing peak inflation, improved policy clarity, or strengthening growth drivers Group 1: Market Performance - The MSCI World Index has increased by 2.4% year-to-date, following a nearly 19% rise in 2025 [1] - The iShares MSCI ACWI ex US ETF is up 5.2% year-to-date, while the SPDR S&P 500 ETF Trust has only gained 1.6% [1] - Emerging markets have shown significant strength, with the iShares MSCI Emerging Markets ETF rising over 6.5% year-to-date [1] Group 2: Country-Specific ETF Performance - iShares MSCI Norway ETF is at $31.20, close to its 52-week high of $32.76 [2] - Global X MSCI Norway ETF is at $32.42, near its 52-week high of $32.59 [2] - iShares MSCI Turkey ETF is at $39.54, just below its 52-week high of $39.95 [2] - iShares MSCI South Korea ETF is at $121.57, close to its 52-week high of $121.85 [2] - iShares MSCI Japan ETF is at $85.53, near its 52-week high of $85.99 [2] Group 3: Market Drivers - The Norwegian stock market benefits from stable monetary policies, with Norges Bank maintaining a policy rate of 4% [3] - Turkey's stock market shows positive momentum as inflation decelerates to 30.89% in December 2025, the lowest since November 2021, boosting market confidence [4] - South Korea's market rally is driven by a strong semiconductor sector, with the KOSPI surpassing 5,000 points due to increased AI chip sales and strong export figures [5] - Japanese stocks are rising due to political and macroeconomic factors, including a snap election and plans for bold fiscal policies [6] - The Bank of Japan has upgraded its growth forecast to 0.9% for the fiscal year ending March 2026, up from 0.7%, and increased its fiscal 2026 growth forecast to 1% [7]

Core Insights - The SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) is characterized by its lower cost and technology focus, while the iShares MSCI ACWI ex US ETF (ACWX) provides a higher yield, greater international diversification, and significantly more assets under management [1][2] Cost and Size Comparison - NZAC has an expense ratio of 0.12% compared to ACWX's 0.32%, making NZAC more cost-effective [3][4] - As of January 9, 2026, NZAC has a 1-year return of 22.0% and a dividend yield of 1.9%, while ACWX has a 1-year return of 34.2% and a dividend yield of 2.7% [3][4] - NZAC has assets under management (AUM) of $182.0 million, whereas ACWX has AUM of $8.4 billion [3][12] Performance and Risk Comparison - Over a five-year period, NZAC experienced a maximum drawdown of -28.29%, while ACWX had a maximum drawdown of -30.06% [5] - An investment of $1,000 in NZAC would have grown to $1,501 over five years, compared to $1,267 for ACWX [5] Sector Exposure - ACWX holds approximately 1,700 stocks, with major sector allocations in financial services (25%), technology (15%), and industrials (15%) [7] - NZAC has a heavier tilt towards technology at 35% and includes major U.S. companies like Nvidia, Apple, and Microsoft [8][11] Investment Focus - NZAC integrates climate-focused screening and includes U.S. stocks, aligning with the Paris Climate Agreement by excluding fossil fuels and controversial weapons [10][11] - ACWX focuses solely on non-U.S. companies, providing pure international exposure without climate or ESG considerations [10][12] Strategic Considerations - Investors must decide between NZAC's climate alignment and ACWX's dedicated international allocation, depending on their portfolio strategy [10][13]