Rebuilding Confidence in International Investing: Why SPDW's Value Proposition Outshines ACWX

When it comes to international equity exposure, investor confidence often hinges on two competing concerns: cost efficiency and portfolio diversity. The SPDR Portfolio Developed World ex-US ETF (SPDW) and iShares MSCI ACWI ex US ETF (ACWX) both address the desire for non-U.S. market access, but they chart notably different paths. SPDW emphasizes affordability and developed-market focus, while ACWX casts a wider net across both developed and emerging markets. For investors weighing where to deploy capital internationally, understanding these distinctions—particularly in fees, performance, and holdings—becomes crucial.

The most immediate difference between these two funds reveals itself in their expense ratios. SPDW charges just 0.03% annually compared to ACWX’s 0.32%, a tenfold gap that translates into meaningful savings over time. Beyond cost, SPDW currently delivers a 3.3% dividend yield, outpacing ACWX’s 2.83%. As of mid-January 2026, SPDW had generated a 37.84% one-year return versus ACWX’s 35.89%, demonstrating that the lower-cost option isn’t sacrificing performance for its pricing advantage.

The Cost Question: Why SPDW Emerges as the Value Leader

The expense ratio difference between these funds deserves attention beyond mere percentage points. SPDW’s 0.03% fee structure means an investor holding $100,000 in the fund pays just $30 annually. ACWX’s 0.32% ratio charges $320 for the same holding—nearly eleven times more. Over decades of investing, this disparity compounds substantially. Combined with SPDW’s higher income generation through dividends, the value case for SPDW strengthens, particularly for cost-conscious investors who prioritize long-term wealth accumulation over short-term trading activity.

This cost efficiency extends to real-world outcomes. SPDW manages $33.45 billion in assets under management (AUM), while ACWX oversees $7.87 billion—suggesting significant investor confidence in SPDW’s model. The fund’s expense ratio places it among the most competitively priced international equity offerings in the market.

Performance Head-to-Head: A Five-Year Comparison

When examining risk-adjusted returns, both funds demonstrate similar resilience. Over five years, SPDW experienced a maximum drawdown of -30.23%, virtually matching ACWX’s -30.03%. However, SPDW’s total return tells a stronger story: a $1,000 investment in SPDW five years ago would have grown to approximately $1,304, compared to $1,251 for ACWX. This 4.2% performance advantage aligns with SPDW’s lower fee burden—a smaller expense ratio allowing more of your returns to remain invested and compounding.

The one-year return advantage of SPDW also reflects broad international equity strength in 2025, with developed markets leading gains. Beta values for both funds hover near 1.02-1.03, indicating volatility roughly aligned with U.S. market benchmarks, though their international exposure naturally insulates them from domestic-only risk concentration.

Inside the Portfolios: Market Coverage and Strategic Holdings

The fundamental distinction between these ETFs lies in their market universe. ACWX encompasses 1,751 stocks across developed and emerging markets, allocating heavily to financial services (25%), technology (15%), and industrials (15%). The fund’s top three holdings—Taiwan Semiconductor Manufacturing Company (3.9%), ASML (1.53%), and Tencent Holdings (1.4%)—reflect this diversified, emerging-market inclusive approach.

SPDW, by contrast, restricts its universe to developed international markets, emphasizing financial services (23%), industrials (19%), and technology (11%). Its largest positions—ASML (1.73%), Samsung (1.65%), and Roche (0.98%)—present a more globally distributed, developed-market focused portfolio. Notably, TSMC appears in ACWX but not SPDW, primarily because Taiwan occupies emerging-market classification. This distinction matters: TSMC has surged nearly 50% over the past year and 150% over five years, capitalizing on artificial intelligence demand. Investors betting on the AI chip supercycle may view ACWX’s TSMC access as strategic.

The sector weightings further differentiate the funds. ACWX’s 15% technology allocation exceeds SPDW’s 11%, reflecting emerging-market tech concentration. SPDW’s 19% industrials weighting—versus ACWX’s 15%—highlights a more traditional, manufacturing-focused positioning typical of developed markets.

Making Your Choice: Which ETF Aligns With Your Strategy?

The decision between SPDW and ACWX ultimately depends on your investment priorities and market outlook. Select SPDW if your confidence in international investing emphasizes cost minimization, dividend income generation, and developed-market stability. The combination of 0.03% fees and 3.3% yield appeals to buy-and-hold investors seeking reliable income streams without emerging-market volatility.

Choose ACWX if you prioritize broader geographic diversification and emerging-market exposure, particularly semiconductor and technology leadership. The fund’s inclusion of TSMC and other emerging-market champions may justify its higher 0.32% expense ratio for investors targeting multi-decade growth and willing to absorb additional volatility.

For many investors, the confidence-building choice comes down to this: paying ten times less in fees (SPDW) while receiving comparable or superior performance often justifies the tradeoff of excluding emerging markets entirely. However, if you believe the next decade of wealth creation will emerge from developing economies—particularly Asia-Pacific tech—ACWX’s broader mandate may prove more valuable despite its cost disadvantage.

Both funds offer legitimate paths to international equity participation. The deciding factor remains your personal investment timeline, risk tolerance, and fee sensitivity.