ACWI Vs. VT: Vanguard Wins Again
January 30, 2023
- In this article, I focus on the iShares MSCI ACWI ETF (ACWI) and how it compares to the Vanguard Total World Stock ETF (VT).
- For the longest common period since June 2008, ACWI currently lags VT by about 14%-points or 41 basis points per year.
- The performance gap mostly comes from different underlying indices. VT tracks an index with >9,400 stocks whereas ACWI ignores small caps and “only” holds about 2,800 positions.
- ACWI is thus farther away from the academic idea of truly passive investing (holding a market-cap weighted portfolio of all investable stocks).
- ACWI also comes with higher fees (0.32% TER vs. 0.07% for VT). For investors who seek passive exposure to global stock markets, VT therefore seems the better choice.
- SA #18: RPV – ‘Pure Value’ Is Indeed More Value Than ‘Value’
- SA #17: IUSV – Transparent Value With Modest Active Risk
- SA #16: IWD – Low Growth Is Not Necessarily Value – Also For Large Caps
- SA #15: VLUE – Transparent Value With Little Industry Bets
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