SPGM Brings Broader Diversification and Lower Cost Than NZAC

The SPDR Portfolio MSCI Global Stock Market ETF (NYSE:SPGM) stands out for its broader diversification, higher recent performance, and larger assets under management, while the SPDR MSCI ACWI Climate Paris Aligned ETF (NASDAQ:NZAC) offers an ESG-focused approach with a climate-conscious mandate.

Both ETFs target global equities, but with different priorities: The SPDR Portfolio MSCI Global Stock Market ETF aims for maximum diversification across nearly 2,900 holdings, while SPDR MSCI ACWI Climate Paris Aligned ETF tracks a climate-aligned index with an ESG screen, appealing to investors seeking sustainability factors alongside global exposure. Here’s how they stack up.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

SPDR Portfolio MSCI Global Stock Market ETF is more affordable, with a lower expense ratio, and offers a slightly higher dividend yield compared to SPDR MSCI ACWI Climate Paris Aligned ETF.

Performance & risk comparison

What's inside

The SPDR Portfolio MSCI Global Stock Market ETF holds 2,895 stocks, spanning technology (26%), financial services (17%), and industrials (12%), and has been trading for 13.7 years. Its top positions include Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT), each making up about 0.04% of assets—demonstrating low concentration risk. There are no ESG or thematic screens, so it reflects the broad market as tracked by the MSCI ACWI IMI Index.

SPDR MSCI ACWI Climate Paris Aligned ETF is smaller, with 736 holdings, but leans more heavily into technology (31%) and applies an ESG screen as part of its climate-aligned mandate. Its top holdings are similar—Nvidia, Apple, and Microsoft —with slightly higher weights. The ESG overlay and climate focus may appeal to those prioritizing sustainability, but also introduce some sector tilts compared to a plain-vanilla global tracker.

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Foolish take

Alignment with ESG principles and a slightly higher expense ratio haven't been much of a drag on the SPDR MSCI ACWI Climate Paris Aligned ETF when compared to the SPDR Portfolio MSCI Global Stock Market ETF. Over the past five years, the ESG limited ETF delivered a 72% total return. That was just 5.2% less than the SPDR Portfolio MSCI Global Stock Market ETF.

The SPDR MSCI ACWI Climate Paris Aligned ETF's climate-focused mandate leads to different sector allocations. It has zero exposure to energy stocks, and about 2.1% of its holdings are in real estate.

The SPDR Portfolio MSCI Global Stock Market ETF offers comprehensive global equity coverage with thousands of holdings spread across different sectors. About 3.7% of the portfolio is in energy stocks, and 6.7% is in real estate.

A climate mandate and higher expense ratio mean the SPDR MSCI ACWI Climate Paris Aligned ETF might not perform quite as well as funds that cast a wider net. If the climate mandate is important to you, though, a slightly lower return is probably worth it.

Glossary

ETF: Exchange-traded fund, a pooled investment that trades on stock exchanges like a single stock.
Diversification: Investing in a wide range of assets to reduce risk from any single holding.
Assets under management (AUM): The total market value of assets an investment fund manages on behalf of investors.
Expense ratio: Annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Dividend yield: Annual dividends paid by a fund divided by its current price, expressed as a percentage.
Beta: A measure of an investment’s volatility compared to the overall market, typically the S&P 500.
Max drawdown: The largest percentage drop from a fund’s peak value to its lowest point over a period.
ESG screen: A set of criteria evaluating environmental, social, and governance factors to select or exclude investments.
Climate Paris Aligned: Investment approach aiming to align with the Paris Agreement’s climate goals, often reducing carbon exposure.
Sector tilt: When a fund has higher or lower exposure to certain industries compared to a broad market benchmark.
Concentration risk: The risk of losses from having a large portion of assets in a small number of holdings.
MSCI ACWI IMI Index: A global stock index covering developed and emerging markets across large, mid, and small-cap companies.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.