iShares MSCI World ETF 2026: Tech Boom Fuels 21% Rally – But Is the Hype Sustainable?

• The Tech-Driven Surge: How AI and Currency Winds Supercharged URTH
• Hidden Risks: Overexposure and Lofty Valuations
• Chart Check: Room to Run or Topping Out?
• The Bottom Line: To Hold or Fold?
• FAQs

The iShares MSCI World ETF (URTH) delivered a stellar 21% return in 2025, driven by AI euphoria and a weakening US dollar. But with tech stocks now dominating 36% of its portfolio and valuations at a premium, investors face a critical question: Is this growth story still a buy, or are we nearing a bubble? We break down the risks, rewards, and what the charts suggest for 2026.

The Tech-Driven Surge: How AI and Currency Winds Supercharged URTH

The iShares MSCI World ETF’s 21.28% gain in 2025 wasn’t just luck—it was a perfect storm of tech momentum and macroeconomic tailwinds. The ETF’s heavy weighting in AI darlings like Nvidia (up 27.5%) and the "Magnificent Seven" (Alphabet, Apple, etc.) paid off handsomely. Meanwhile, a 9.4% drop in the US dollar boosted returns for non-US assets. Net inflows of $1.52 billion over 12 months confirmed investor appetite, but this concentration brings risks. As one BTCC analyst noted, "When tech sneezes, URTH catches a cold."

Hidden Risks: Overexposure and Lofty Valuations

Dig deeper, and cracks emerge in the ETF’s armor. Despite holding 1,322 stocks, its top 10 positions account for 26% of assets—a classic case of "diversification theater." Nvidia alone represents 5.32%, while Alphabet’s dual-class shares push its effective weight to 4.2%. The result? A price-to-earnings ratio of 26.04, well above the category average (20.55). Geographic bias is another concern: 69.4% US exposure leaves little room for emerging markets or European recovery plays. Compare this to Vanguard’s Total World Stock ETF (VT), which offers broader diversification at half the cost (0.06% vs. URTH’s 0.24%).

Chart Check: Room to Run or Topping Out?

Technically, URTH looks strong but not overbought. Trading NEAR its all-time high of $189 with an RSI of 57 (neutral), there’s no immediate red flag. However, February 2026’s MSCI index rebalance could reshuffle weights—potentially reducing tech dominance. Historical data from TradingView shows that similar RSI levels in 2020 preceded a 15% correction when Fed rates rose.

The Bottom Line: To Hold or Fold?

URTH remains a compelling proxy for global tech growth, but its risks are mounting. Dollar-cost averaging might suit long-term investors, while tactical traders could wait for a pullback below $175. As always, diversification is key—consider pairing URTH with small-cap or value ETFs to hedge concentration risk.