NZAC vs. URTH: Which Global ETF Is the Better Buy?
2026-08-03 15:27
•Andy Gould •The Motley Fool
•••••• •••• Axe Cap view
NZAC or URTH: Which Global ETF Fits SA Investors?
Comparing a climate-focused global ETF with a broad developed-market fund and their impact from a South African investor’s perspective.
South African investors often look globally to diversify, but the ETF choice matters. NZAC leans into climate-conscious investing and throws emerging markets into the mix, which might appeal to those wanting ESG exposure and higher dividend yield. However, URTH’s simpler, no-ESG-filter approach focuses solely on developed markets and has outperformed NZAC over one and five years, while also having lower volatility. For rand investors, the USD/ZAR exchange rate impact is crucial. URTH’s stable performance might better cushion currency swings, especially given rand volatility tied to commodity cycles and local politics. NZAC’s inclusion of emerging markets could add risk here, making it more volatile for a South African investor. Tech giants like Apple, Microsoft, and Nvidia dominate both funds equally, so differences are really about market scope and screening. If your priority is performance and less hassle around ESG filters, URTH is the cleaner pick. NZAC works if ESG matters heavily to you, but be prepared for rougher rides. This view may falter if global warming regulations rapidly shift capital into sustainable stocks, favoring NZAC better than recent history suggests;. this is just our opinion and not financial advice
For most South African investors, buy URTH as the core global equity ETF and hold rand hedges to manage currency risk. Consider NZAC only if you want explicit ESG exposure and can handle volatility.
- URTH
- NZAC
- USD/ZAR
- sudden regulatory shifts favoring ESG stocks
- unexpected rand volatility due to local political changes
6/10
The State Street SPDR MSCI ACWI Climate Paris Aligned ETF (NZAC) and iShares MSCI World ETF (URTH) offer different approaches to global stock investing. NZAC features a lower expense ratio (0.12% vs 0.24%), higher dividend yield (2.06% vs 1.40%), and includes emerging markets with climate screening, while URTH focuses on developed-market stocks without ESG filters. However, URTH has delivered superior one- and five-year returns with lower volatility, suggesting that its simpler approach to developed-market exposure has outperformed NZAC's climate-focused strategy.
Our take is based on reporting first published by The Motley Fool.