IXUS vs. NZAC: Broad International Exposure or Climate-Focused Investing -- Which ETF Is the Better Buy?
Key Points
IXUS provides broad exposure to thousands of non-U.S. companies at a lower cost than NZAC.
NZAC carries a significantly higher technology weighting and has posted slightly better five-year returns.
IXUS offers a higher dividend yield than NZAC.
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Comparing the iShares Core MSCI Total International Stock ETF (NASDAQ:IXUS) and the State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NASDAQ:NZAC) comes down to a choice between ultra-low-cost, ex-U.S. diversification and a more targeted global strategy built around climate-aligned corporate performance.
While both funds offer global equity exposure, they differ fundamentally in geographic and thematic construction. IXUS prioritizes low-cost coverage of developed and emerging markets outside the U.S., while NZAC layers in a climate-focused screen that -- notably -- still includes domestic U.S. equities.
Snapshot (cost & size)
| Metric | IXUS | NZAC |
|---|---|---|
| Issuer | iShares | State Street |
| Expense ratio | 0.07% | 0.12% |
| 1-year return (as of July 20, 2026) | 23.66% | 16.09% |
| Dividend yield | 2.94% | 2.06% |
| Beta | 0.92 | 1.04 |
| AUM | $58.5 billion | $192.3 million |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
IXUS is the cheaper option, with a low 0.07% expense ratio. Both funds pay a dividend, but NZAC's climate-aligned strategy results in a lower yield than the IXUS -- likely a byproduct of NZAC’s heavier tech weighting and its inclusion of domestic growth companies, which tend to pay smaller dividends than more established international names.
Performance & risk comparison
| Metric | IXUS | NZAC |
|---|---|---|
| Max drawdown (5 yr) | (30.0%) | (27.65%) |
| Growth of $1,000 over 5 years (total return) | $1,532 | $1,579 |
What's inside
Launched in 2014, NZAC aims to mirror the total return of the MSCI ACWI Climate Paris Aligned Index. It holds 629 stocks and applies an ESG screen designed to keep the portfolio aligned with Paris Agreement climate goals. The portfolio leans most heavily into technology at 36.6%, followed by financial services at 16.2%, and healthcare at 9.2%. Its largest positions include Nvidia (NASDAQ:NVDA) at 5.7%, Apple (NASDAQ:AAPL) at 4.6%, and Microsoft (NASDAQ:MSFT) at 2.9%.
IXUS casts a much wider net, with a portfolio of 4,335 large-, mid-, and small-cap companies -- all outside the United States. Its top holdings include Taiwan Semiconductor Manufacturing (TWSE:2330) at 4.4%, Samsung Electronics (KOSE:A005930) at 2.3%, and Sk Hynix (KOSE:A000660) at 2.2%. The fund’s top sectors include technology at 22.4%, financial services at 22.3%, and industrials at 14.9%. Unlike NZAC, it offers broad market exposure without any environmental or ESG mandates. IXUS was launched in 2012.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Deciding between these two funds starts with defining what kind of exposure an investor is looking for. IXUS is the more traditional choice: broad, diversified, and inexpensive, with a meaningfully higher yield that makes it attractive to income-focused investors. If you’re seeking simple, low-cost access to international markets, IXUS is a good fit.
NZAC is a different animal. Its concentrated bet on technology and its inclusion of climate-screened U.S. companies help explain why it has outpaced IXUS over the last five years -- U.S.-based tech companies have been a dominant growth driver across global markets during that stretch. But that same concentration means NZAC's returns are more tied to how a handful of mega-cap tech names perform -- which might be of particular concern for investors who believe tech company valuations are stretched at the moment.
Investors seeking steady income and broad, low-cost diversification outside the U.S. will lean toward IXUS. Those comfortable with more tech exposure -- and who want their portfolio to reflect climate considerations -- may find NZAC's approach more compelling, even with its lower dividend. As with most ETF matchups, the right pick depends less on recent performance history and more on what role the fund is meant to play in a broader portfolio.
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Andy Gould has positions in Apple and Nvidia and has the following options: long January 2027 $125 calls on Nvidia, short August 2026 $355 calls on Apple, and short January 2027 $125 puts on Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
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