For years, US-heavy portfolios were the path of least resistance. But the performance gap is narrowing, and investors who assumed international exposure was optional are reconsidering. iShares MSCI ACWI ex U.S. ETF (NYSEARCA:ACWX) tracks every major equity market outside the United States in a single, low-cost fund.
What ACWX Is Built to Do
ACWX tracks the MSCI ACWI ex USA Index, spanning both developed and emerging markets outside the US. Its 0.32% expense ratio and 5% annual portfolio turnover reflect a genuinely passive structure. Top holdings include Tencent, ASML, Samsung, AstraZeneca, and Roche across Europe, Asia-Pacific, and emerging markets. No single position exceeds 1.51% of the fund, keeping concentration risk minimal.
ACWX functions as a geographic complement to a US equity core, typically paired with an S&P 500 fund for global diversification without overlapping US exposure. Its $8.7 billion in AUM and inception dating to March 2008 reflect nearly two decades of institutional and retail adoption.
Does It Deliver?
Recent performance tells a striking story. Over the past year, ACWX has returned 35.8% – nearly triple the S&P 500’s 13.0% gain. That outperformance was driven by a weakening dollar, recovering European equities, and a rotation away from richly valued US growth stocks, exactly the reversal of US dominance that long-term ACWX holders anticipated.
The momentum has extended into 2026. ACWX is up 10.4% year-to-date while the US market has remained largely flat, suggesting the shift in global equity leadership may have staying power rather than being a brief cyclical blip.
The longer-term picture is more nuanced. Over five years, ACWX returned 50.8% versus 76.8% for the S&P 500, reflecting the sustained US growth cycle of the early 2020s. Against its closest peer, Vanguard FTSE All-World ex-US ETF (NYSEARCA:VEU), ACWX tracks nearly identically across all timeframes, with VEU edging ahead slightly due to minor index methodology differences.
The Tradeoffs
Currency exposure is the most significant hidden variable. Because ACWX holds assets priced in euros, yen, pounds, and dozens of other currencies, a strengthening US dollar directly erodes returns for American investors even when underlying businesses perform well.
ACWX also carries lighter emerging market exposure than its name might suggest. Holdings in India, Brazil, and other high-growth markets are modest, meaning investors seeking deep EM exposure will need a dedicated fund alongside it. The fund’s 1.89% dividend yield comes with foreign tax withholding complexity that can reduce after-tax income for taxable account holders.
Top Gaining Stocks
Top Losing Stocks