International ETFs: Low-Cost SPDW vs. Values-Based NZAC

SPDR Portfolio Developed World ex-US ETF (NYSEMKT:SPDW) stands out for its ultra-low cost, higher yield, and greater international diversification, while SPDR MSCI ACWI Climate Paris Aligned ETF (NASDAQ:NZAC) leans into technology and climate-focused ESG screens.

This comparison looks at two global equity ETFs with very different approaches: NZAC incorporates a Paris-aligned ESG mandate and a notable technology tilt, while SPDW provides broad access to developed markets outside the United States at a fraction of the cost. Both target diversified exposure but cater to distinct investor preferences around sustainability, regional focus, and income.

Snapshot (cost & size)

The 1-yr return represents total return over the trailing 12 months.

SPDW comes in as the more affordable option with an expense ratio of 0.03%, undercutting NZAC’s 0.12%. Yield seekers may also find SPDW appealing, as its payout is higher than NZAC’s.

Performance & risk comparison

What's inside

SPDW tracks developed international equities outside the United States, with financial services (23%), industrials (19%), and technology (11%) as its largest sectors. With 2,390 holdings and nearly two decades of trading history, its top positions—such as ASML, Roche, and Samsung—are broadly diversified and relatively small in portfolio weight, reducing single-company risk.

By contrast, NZAC is built around a climate-focused ESG mandate, screening for companies aligned with the Paris Agreement. Its portfolio leans heavily into technology (35%) and includes significant allocations to cash, financials, and global giants like Nvidia, Apple, and Microsoft. This approach may appeal to those seeking to address climate risk in their investments.

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What this means for investors

SPDW and NZAC both provide access to international stocks, but they define "international" very differently. SPDW sticks to developed markets excluding the U.S., while NZAC takes a global approach that includes American tech giants but excludes companies failing climate criteria. In 2025, SPDW's straightforward strategy delivered stronger returns than NZAC's values-based screening, though both funds outperformed the S&P 500.

SPDW offers investors broad diversification by holding thousands of stocks across Japan, Europe, the U.K., Canada, and Australia and charges an ultra-low 0.03% expense ratio ($3 per $10,000 invested). NZAC includes both U.S. and emerging markets, and it applies a strict Paris Agreement climate screen that exclude fossil fuel producers, tobacco, and high-carbon companies. With a 0.12% expense ratio and just $180 million in assets, it's smaller and more specialized, tilting heavily toward technology.

If you want straightforward, low-cost exposure to developed international markets with strong dividend income and no geographic overlap with U.S. holdings, SPDW makes the most sense. If climate-conscious investing matters to you and you're comfortable with a global approach that includes U.S. tech giants, lower dividends, and ESG screening that may exclude entire sectors, NZAC is the better choice here.

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.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
Beta: Measure of a fund’s volatility compared with a benchmark index, often the S&P 500.
AUM: Assets under management; the total market value of all assets held by the fund.
Max drawdown: The largest peak-to-trough decline in value over a specified period.
Developed markets: Economically advanced countries with mature financial systems and stable regulatory environments.
ESG: Environmental, social, and governance criteria used to evaluate and screen investments.
Paris-aligned: Investment approach aiming to be consistent with the Paris Agreement climate goals on limiting global warming.
Sector allocation: How a fund’s holdings are distributed across different industries, such as technology or financials.
Single-company risk: Risk that poor performance of one holding significantly impacts the overall portfolio.

Sara Appino has positions in Apple and Nvidia. 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.