iShares Paris-Aligned Climate MSCI World ex USA ETF (PABD)

Overview

The iShares Paris-Aligned Climate MSCI World ex USA ETF (ACWX) seeks to track the investment results of an index composed of developed and emerging market equities, excluding the U.S., that are selected and weighted to represent the Paris Agreement goals.

Reputation and Reliability

iShares is a well-established and reputable issuer of ETFs, with a long track record of providing diverse investment options.

Management Expertise

BlackRock, the issuer of iShares, has extensive experience and expertise in managing ETFs and other investment products.

Goal

To track the investment results of an index composed of developed and emerging market equities, excluding the U.S., that are selected and weighted to represent the Paris Agreement goals.

Investment Approach and Strategy

Strategy: The ETF tracks the MSCI World ex USA Climate Paris Aligned Index. It aims to reduce carbon exposure and increase exposure to companies with sustainable business practices.

Composition Primarily holds stocks of large and mid-cap companies in developed and emerging markets, excluding the United States. It focuses on companies with lower carbon emissions and higher environmental scores.

Market Share: ACWX's market share is relatively small compared to broader international ex-US ETFs but significant within the climate-focused ETF category.

Total Net Assets (AUM): 120000000

Key Competitors

• VEU
• VXUS
• IEFA

Competitive Landscape

The international ex-US ETF market is dominated by broad-based ETFs like VEU and VXUS. ACWX offers a differentiated approach by focusing on climate alignment, attracting investors with specific ESG preferences. The disadvantage is a smaller scope and potentially higher tracking error compared to broad market ETFs.

Historical Performance: Historical performance data is not provided, the returns are based on MSCI World ex USA Climate Paris Aligned Index which is affected by the performance of companies that have lower carbon emissions and higher environmental scores.

Benchmark Comparison: Performance should be compared to the MSCI World ex USA Index and similar climate-focused benchmarks to assess the impact of its climate alignment strategy.

Expense Ratio: 0.2

Average Trading Volume

The average trading volume is moderate, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is typically narrow, reflecting efficient trading and lower transaction costs.

Market Environment Factors

Economic growth in developed and emerging markets, government policies promoting renewable energy, and increasing investor demand for sustainable investments all affect ACWX.

Growth Trajectory

Growth depends on increasing adoption of ESG investing, stricter climate regulations, and the outperformance of companies aligned with the Paris Agreement goals. Potential shifts in investment strategy or index methodology could impact future holdings.

Competitive Edge

ACWX's competitive edge lies in its explicit focus on the Paris Agreement goals, providing investors with a clear and measurable way to align their portfolios with climate objectives. The MSCI Climate Paris Aligned indexes are well-regarded. The ETF offers a targeted approach to ESG investing, differentiating it from broader ESG funds. It attracts investors seeking specific climate-related outcomes.

Volatility

Volatility is expected to be similar to other international equity ETFs but may be influenced by the performance of green and sustainable companies.

Market Risk

Exposures to international markets can affect currency fluctuations, political instability, and economic downturns in various regions.

Ideal Investor Profile

Investors who are interested in aligning their portfolios with the Paris Agreement goals. It's also suitable for investors seeking to reduce their portfolio's carbon footprint while maintaining exposure to international equities.

Market Risk

Suitable for long-term investors who are willing to accept the risks associated with international equities and have a strong interest in environmental and social responsibility.

The iShares Paris-Aligned Climate MSCI World ex USA ETF (ACWX) offers a targeted approach to climate-aware investing. It tracks an index designed to align with the Paris Agreement goals by reducing carbon emissions and increasing exposure to sustainable companies. The ETF is suitable for long-term investors seeking to incorporate ESG factors into their portfolios. Its performance is influenced by international market dynamics and the growth of sustainable businesses. ACWX offers a differentiated option within the broader international ex-US equity market.

Data Sources:

• iShares website
• MSCI website
• ETF.com

Disclaimers:

The data provided is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and consultation with a qualified financial advisor.