iShares MSCI ACWI ex US IndexACWX

Morningstar Rating

ETF Research and Analysis

by Patricia Oey

Suitability
IShares MSCI ACWI ex-US would serve well as a core foreign holding because of its low cost, broad diversification, and index-based approach. However, Vanguard offers a similar exchange-traded fund with a lower fee.
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Bull Case

Many of the fund's largest holdings are high-quality multinational firms that are positioned to capitalize on growth in emerging markets.

Over the last few years, this ETF's QDI has been over 95%, which is higher than comparable ETFs. Read more

Bear Case

This ETF has a relatively small exposure to small caps: Generally speaking, small-cap international equities provide better diversification benefits as they are more leveraged to local economies.

Despite its broad exposure, this ETF does not provide much diversification benefits for U.S. investors.

The eurozone sovereign debt crisis may result in higher volatility for this ETF in the near term. Read more