Breaking Up With U.S. Stocks? SPDW Offers Lower Costs and Higher Yield Than ACWX.

SPDR Portfolio Developed World ex-US ETF (NYSEMKT:SPDW) and iShares MSCI ACWI ex US ETF (NASDAQ:ACWX) differ meaningfully on cost, market coverage, and sector mix, with SPDW offering lower fees and higher yield, while ACWX brings broader non-U.S. equity exposure and a somewhat higher technology allocation.

SPDW and ACWX are both large international equity ETFs, but they take distinct approaches. SPDW focuses on developed markets outside the United States, while ACWX tracks a broader universe of large- and mid-capitalization non-U.S. equities, making this comparison relevant for investors weighing cost against broader diversification.

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.

SPDW stands out as the more affordable option, with an expense ratio of just 0.03% compared to 0.32% for ACWX. SPDW also currently pays a higher dividend yield, which may appeal to income-focused investors.

Performance & risk comparison

What's inside

ACWX holds 1,751 stocks and covers both developed and emerging non-U.S. markets, rebalancing exposure across financial services (25%), technology (15%), and industrials (15%). Its top holdings include Taiwan Semiconductor Manufacturing (3.9%), ASML (1.53%), and Tencent Holdings (1.4%), with a fund age of 17.8 years. This blend introduces additional technology and emerging market exposure compared to developed-market-only funds, but may also increase sensitivity to global market shifts.

SPDW, by contrast, targets only developed international markets, emphasizing financial services (23%), industrials (19%), and technology (11%). Its largest positions are ASML (1.73%), Samsung (1.65%), and Roche (0.98%), resulting in a slightly more defensive profile and less exposure to emerging market volatility. Both ETFs are broad in scope, but SPDW’s focus may suit investors seeking lower-cost access to developed markets only.

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What this means for investors

Both the ACWX and SPDW ETFs provide exposure to equities outside the U.S., but with varying approaches. One core difference between these two ETFs is what you’ll pay for their teams to manage them, with ACWX’s 0.32% expense ratio coming in far higher than SPDW’s expense ratio of just 0.03%. It’s also worth noting SPDW’s higher dividend yield and slightly better one year-return over ACWX.

One of the biggest differences is SPDW’s focus on only developed international markets, compared to ACWX’s inclusion of both developed and emerging markets. This can have a big impact on overall holdings. For example, Taiwan is widely considered an emerging market, which is why contract semiconductor manufacturer TSMC tops ACWX’s list of holdings, but is absent from the SPDW portfolio.

TSMC has been a market leader, up almost 50% over the last year and 150% over the last five, as it establishes itself among the elite players in the artificial intelligence boom. Investors looking for exposure to this chip giant may want to consider ACWX, while those looking for better value and higher dividend yield may be more inclined to pick up SPDW shares.

Glossary

ETF: Exchange-traded fund that holds a basket of securities and trades on an exchange like a stock.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund's average assets.
Dividend yield: Annual dividends paid by a fund divided by its current share price, shown as a percentage.
Developed markets: Economically advanced countries with mature financial systems and stable regulatory environments.
Emerging markets: Developing countries with growing economies and less mature financial and regulatory systems.
Beta: Measure of an investment's volatility compared with a benchmark index, typically the S&P 500.
Max drawdown: Largest peak-to-trough decline in an investment's value over a specified period.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
AUM (Assets under management): Total market value of all assets managed by a fund.
Sector allocation: How a fund's assets are distributed across different industries, such as technology or financials.
Rebalancing: Periodically adjusting a portfolio's holdings to maintain target sector, country, or asset-class weights.
Dividend-focused investors: Investors who prioritize regular income from dividends over purely price appreciation.

Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Taiwan Semiconductor Manufacturing, and Tencent. The Motley Fool recommends Roche Holding AG. The Motley Fool has a disclosure policy.