Funds & The Inevitable Drift

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The matter of investment, as with all bureaucratic exercises, is rarely a question of choice, but rather a slow acceptance of predetermined outcomes. Two instruments present themselves: the SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC +2.01%), and the iShares Core MSCI Emerging Markets ETF (IEMG +2.50%). Both purport to offer access to global equities, yet their methods differ, one attempting to align with the increasingly abstract notion of ‘climate goals’, the other simply…existing within the framework of emerging markets. A comparison, therefore, is not a search for superiority, but a documentation of the inevitable variations within a system designed to produce predictable, yet ultimately unknowable, results.

A Brief Accounting

Metric NZAC IEMG
Issuer SPDR iShares
Expense ratio 0.12% 0.09%
1-yr return (as of Feb. 8, 2026) 15.54% 37.83%
Dividend yield 1.89% 2.51%
Beta 1.55 0.64
AUM $177.97 million $137.65 billion

Beta, a measurement of volatility relative to an arbitrary index, is itself a testament to the illusion of control. The 1-yr return, a mere snapshot in time, offers little solace when contemplating the vast, indifferent currents of the market.

IEMG, in the preceding twelve months, demonstrated a greater capacity for generating returns, possessed a lower cost of maintenance, and benefited from a significantly larger pool of assets. These are, of course, merely observations, not endorsements. The sheer scale of IEMG is, in itself, unsettling – a vast, impersonal entity operating according to its own inscrutable logic.

Performance & The Illusion of Risk

Metric NZAC IEMG
Max drawdown (5 y) -28.29% -37.16%
Growth of $1,000 over 5 years $1,440 $1,073

The Contents of the Boxes

IEMG, a container holding 2707 emerging-market stocks, prioritizes the technology sector (23%), followed by financials (16%) and industrials (12%). Its primary holdings – Taiwan Semiconductor Manufacturing, Samsung Electronics Ltd, and Tencent Holdings Ltd – reveal a clear preference for Asian technological giants. A perfectly predictable pattern.

NZAC, in its attempt to align with ‘climate-aligned criteria’, holds 729 stocks. Technology accounts for 32% of its assets, followed by financial services (16%) and industrials (10%). Key holdings include Nvidia, Apple, and Microsoft – a clear tilt toward U.S. technology. The fund has been in operation for over eleven years, incorporating an ‘ESG screen’ – a process of evaluating companies based on vaguely defined ‘sustainability themes’. One wonders who determines these themes, and by what authority.

For further guidance on the intricacies of ETF investing, a comprehensive guide awaits at [link]. A guide, naturally, offering more questions than answers.

The Implications, Such as They Are

IEMG, by most quantifiable measures, outperforms NZAC. However, to dismiss the sustainability-focused ETF as irrelevant would be a simplification. The various pledges made in the Paris Agreement, and the increasing demand for climate change efforts, may eventually force even the most recalcitrant companies to comply with these nebulous ‘ESG’ standards. Or they may not. The market, after all, operates on its own timetable.

One potential advantage of NZAC lies in its limited international influence. For U.S. investors, this may offer a degree of insulation from the volatility of foreign markets. However, to believe that any investment can truly shield one from the unpredictable currents of global events is, perhaps, a delusion.

While NZAC does contain foreign assets, its U.S. holdings currently hold enough weight to mitigate the impact of a major event in Asia or Europe. For overall global tech exposure, both funds are, in their own way, adequate. The choice, ultimately, is not a matter of maximizing returns, but of selecting the most comfortable form of resignation.

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2026-02-09 00:52