Does Your ETF Portfolio Reflect Your Goals? A Look at the SPDR Global Stock Market ETF vs. the Climate Paris Aligned ETF.

State Street SPDR Portfolio MSCI Global Stock Market ETF (NYSEMKT:SPGM) offers a broad-market core at a lower cost, while State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NASDAQ:NZAC) provides a specialized, ESG-screened global exposure.

Both funds come from the State Street stable but address different investor philosophies. While the State Street SPDR Portfolio MSCI Global Stock Market ETF provides a traditional, low-cost core for global equity exposure, the State Street SPDR MSCI ACWI Climate Paris Aligned ETF overlays a specific climate-conscious framework. This match-up compares a broad, all-cap global strategy against a portfolio specifically reweighted to meet the carbon-reduction goals of the Paris Agreement, providing two distinct ways to own the world market.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The State Street SPDR Portfolio MSCI Global Stock Market ETF is the more affordable choice with a 0.09% expense ratio. While the climate-focused fund offers a higher 2.1% trailing yield, investors may find the larger liquidity and size of the global stock market fund more appealing for core portfolio allocation.

Performance & risk comparison

What's inside

State Street SPDR Portfolio MSCI Global Stock Market ETF tracks a broad global index, holding 2,928 stocks across developed and emerging markets. Its largest positions include Nvidia at 4.26%, Apple at 4.2%, and Microsoft at 2.48%. Sector weights lean toward technology at 28.7%, financial services at 17.23%, and industrials at 12.12%. The fund provides exposure across the entire range of market capitalizations to help lessen country-specific investment risks. Launched in 2012, the fund has paid $1.54 per share over the trailing 12 months, which on its recent ~$84.28 share price works out to a 1.8% yield.

The State Street SPDR MSCI ACWI Climate Paris Aligned ETF uses an environmental, social, and governance (ESG) screen to select its 629 holdings, focusing specifically on climate transition risks and opportunities. Its largest positions include Nvidia at 5.96%, Apple at 5.3%, and Microsoft at 3.15%. The portfolio is weighted toward technology at 34.9%, financial services at 17.5%, and industrials at 9.36%, with 10% of its holdings in cash or other assets. This strategy aims to satisfy the minimum standards of the EU Paris Aligned Benchmark. Launched in 2014, the fund has paid $0.94 per share over the trailing 12 months, which on its recent ~$45.24 share price works out to a 2.1% yield.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

There are a lot of different core strategies investors employ when building a portfolio. Some aim for maximum diversification, others target income generation or growth. And some go for specific stories, themes, or other criteria. Choosing between these two ETFs means determining what approach is most important to you.

The State Street SPDR Portfolio MSCI Global Stock Market ETF allows you to invest in a large index of nearly 3,000 stocks and $1.7 billion in assets under management. That gives it diversification and liquidity, especially considering its exposure to companies of all market capitalizations and both developed and emerging markets. It’s a relatively low-cost way to own a massive slice of the overall global market.

The State Street SPDR MSCI ACWI Climate Paris Aligned ETF holds far fewer companies — about 630 — and only those that strictly adhere to Paris Climate Agreement goals, meaning it excludes companies with large carbon footprints (think thermal coal, oil, and gas) and favors companies with strong ESG profiles and climate-transition opportunities. This may appeal to investors who want their portfolios to more closely match their core beliefs, or because they believe that reducing climate risk is good business.

If this is the kind of investing that appeals to you, the NZAC is a great choice — it’s pretty inexpensive to hold, generates about a 2% dividend yield, and isn’t very volatile. If it’s not a philosophical approach you want to take, or if you’re simply looking for a much larger and more diverse fund, go with SPGM.

Sarah Sidlow has positions in Apple, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.